New York magazine reports that activists are succeeding in persuading public pension funds to drop out of hedge fund investments.
The pension fund trustees have included that these investments are a bad risk. Their decision making was influenced by an activist group called the Hedge Clippers, which was created by the AFT to embarrass the hedge fund managers.
Part of the anger towards the hedge funds results from their heavy investment in Puerto Rico bonds and their public relations campaign to stop Congress from allowing Puerto Rico to get bankruptcy protection. Certain hedge funds bought Puerto Rico’s bonds at a deep discount and now hope to make billions by getting paid in full. They have been running slick commercials on television featuring a Puerto Rican woman who says she will lose her life savings if Congress allows Puerto Rico to find a solution other than paying the bondholders in full.
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