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Paul Singer: CalPERS 'off-base' to ax hedge funds

Elliott Management founder and CEO Paul Singer speaks during the SkyBridge Alternatives conference in Las Vegas, May 9, 2012.
Jacob Kepler | Bloomberg | Getty Images

Billionaire investor Paul Singer has a message for the California Public Employees' Retirement System: Dumping your hedge funds makes no sense.

"We are certainly not in a position to be opining on the 'asset class' of hedge funds, or on any of the specific funds that were held or rejected by CalPERS, but we think the decision to abandon hedge funds altogether is off-base," Singer wrote in a recent letter to clients of his $25.4 billion Elliott Management Corp.

CalPERS, the largest public pension in the country, announced in September that it was axing most of its hedge funds, a $4 billion slate of a $300 billion portfolio, save for those that use a corporate activist strategy.

"Hedge funds are certainly a viable strategy for some, but at the end of the day, when judged against their complexity, cost and the lack of ability to scale at CalPERS' size, the [hedge fund] program is no longer warranted," Ted Eliopoulos, CalPERS' interim chief investment officer, said at the time.