Rhode Island Steers Clear of Hedge Fund Trap

Rhode Island Steers Clear of Hedge Fund Trap

While Massachusetts had almost $66 million tied up in two of the three hedge funds raided by the FBI last month, the Rhode Island General Treasurer’s office says the state has nothing to worry because it doesn’t invest any of its pension fund with hedge funds.

“Rhode Island’s pension fund is safe from any of that,” David Layman, Communications Director at the General Treasurer’s office told GoLocalProv. “We don’t use hedge funds at all.”

The Boston Globe reported yesterday that the Bay State had invested a small percentage of its pension fund with Level Global Investors and Diamondback Capital Management, two firms the FBI raided in November as a result on an insider trading investigation. It didn’t have any money connected with Loch Capital Management, a Boston based company.

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For years some states have invested with hedge funds, but many have become hesitant in recent years as more and more Ponzi schemes have come to light. In the same story, the Globe reported that Massachusetts lost almost $100 million in investments since 2006.

Layman said Rhode Island is not as risk of losing any of its pension funds because the state’s broad range of investments do not include hedge funds and are diversified. He said the majority of the state’s money goes to U.S. equities, international equities, bonds, real estate and private equity.