Discussion: Do pension funds need hedge funds, and vice versa? A discussion on the merits of institutional involvement in the hedge fund industry

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A debate on the merits of institutional involvement in the hedge fund industry. For a number of years, the Finance and Investment Board has formed working parties to look at hedge funds and the resulting papers have been presented and discussed at the annual Investment Conferences. These promoted much debate at the time, and have served to educate the profession on the features of the hedge fund industry. John Caslin covered many of these issues in his excellent paper presented to the Society of Actuaries in Ireland and subsequently to the Staple Inn Actuarial Society. Previous research has looked at the attractions of hedge funds, or absolute return strategies of all types, for pension funds, and has highlighted the quality of data that is available, the attractions of low correlation and the question of whether hedge funds are an asset class. We have also addressed the questions of transparency, fee levels and the broader issues of fiduciary responsibility, trustee education and the role of intermediaries such as funds of funds.