JP Morgan is set to liquidate all of the hedge fund investments held by its US$13 billion pension fund, industry website Hedge Fund Alert has reported.
According to the website, the plan is for JP Morgan Retirement to withdraw approximately US$2.3 billion it has invested in funds spread out among about 30 managers.
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JP Morgan units including Highbridge Capital manage US$26.5 billion of regulatory assets, including leverage, Hedge Fund Alert’s Manager Database reveals.
The move may hang the future of managing director Renee Kelly and her team in suspense, who manage the pension’s hedge fund portfolio.
A source who works closely with institutional investors told the website that it appears JP Morgan wants to "immunize" its pension plan by pulling back from hedge funds and traditional equity investments.
"If you can use fixed income to offset your liability stream, then there is no need for directional strategies like equities, or [to be] levered like hedge funds," the undisclosed source was quoted as saying.
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By GlobalDataFew years back, Citigroup also scaled backed a hedge fund portfolio that amounted to 10% of its overall pension assets. Also, Citi’s retirement plan also was overfunded at the time.
