But whether the funds can accommodate such an inflow is another story. The squeeze is counterintuitive given the explosion in the number of funds. Ten years ago, there were a few hundred hedge funds that served as secretive preserves of the wealthy. Defined-contribution pension plans are coming late to the party. Because they are big, pensions are used to calling the shots.
Pensions typically require more transparency and personal attention.
Calpers, for example, will require the five to 10 hedge funds into which it invests to report performance to InvestorForce, an Internet database in which it recently took a stake. They couldn't believe we didn't want to do it. Giant investors may get some relief from mutual funds that are opening hedge funds. Many also are resorting to managers of managers. Calpers is open to all of the above, to wedge a bit more into a tantalizing area.