The office of New York State comptroller is hardly exciting.
It's a shame, because the state comptroller is one of the most important elected officials in the state, and Trichter has some fresh ideas about how to manage the public's money.
The system's pension fund is responsible for guaranteed payments to 1.1 million people, made up of 652,000 active state and local workers and 471,000 retirees.
The fund is seeded by contributions by state and local government, as well as by workers; taxpayers, not retirees, must make up any shortfalls in investment decisions.
Calling DiNapoli the "$6 billion man," Trichter notes that the comptroller has paid that amount, over his tenure, to hedge funds, private-equity funds, and other "Alternative funds," including $818 million in 2017-and not for the stellar performance that such high-end investments are supposed to provide.
Rather, Trichter notes, the nearly $35 billion in alternative investments, including nearly $8 billion in hedge funds, have underperformed, earning just 5.4 percent annually over DiNapoli's tenure, "While a passive investment in the S&P 500" would have earned 7.46 percent.
If a hedge is necessary, Trichter would "Buy out-of-the-money puts"-essentially, cheap bets that a booming stock market will fall, "As opposed to actually investing in hedge funds." But it's not clear why a well-funded pension entity with an indefinite time frame even needs a hedge; a well-managed fund should be able to withstand even sharp short-term market drops.
https://www.city-journal.org/jonathan-trichter-new-york-pension-system
It's a shame, because the state comptroller is one of the most important elected officials in the state, and Trichter has some fresh ideas about how to manage the public's money.
The system's pension fund is responsible for guaranteed payments to 1.1 million people, made up of 652,000 active state and local workers and 471,000 retirees.
The fund is seeded by contributions by state and local government, as well as by workers; taxpayers, not retirees, must make up any shortfalls in investment decisions.
Calling DiNapoli the "$6 billion man," Trichter notes that the comptroller has paid that amount, over his tenure, to hedge funds, private-equity funds, and other "Alternative funds," including $818 million in 2017-and not for the stellar performance that such high-end investments are supposed to provide.
Rather, Trichter notes, the nearly $35 billion in alternative investments, including nearly $8 billion in hedge funds, have underperformed, earning just 5.4 percent annually over DiNapoli's tenure, "While a passive investment in the S&P 500" would have earned 7.46 percent.
If a hedge is necessary, Trichter would "Buy out-of-the-money puts"-essentially, cheap bets that a booming stock market will fall, "As opposed to actually investing in hedge funds." But it's not clear why a well-funded pension entity with an indefinite time frame even needs a hedge; a well-managed fund should be able to withstand even sharp short-term market drops.
https://www.city-journal.org/jonathan-trichter-new-york-pension-system
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