University of California swaps hedge funds for private credit

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The University of California’s investment fund (UC Investments) is to stop making hedge fund allocations and will instead commit more of its capital to private credit investments, according to a report by Bloomberg.

UC Investments, which manages about $152 billion, including retirement, endowment and cash assets, has been investing in hedge funds for two decades and had $4.38 billion in absolute return funds as of 31 December. According to chief investment officer Jagdeep Bachher though, a change of strategy has been agreed.

In a meeting on Thursday, Bachher said: “Within two or three years, whenever we can get liquidity from our hedge funds, we will be primarily all out. Once we’re out, we’ll replace that obviously with private credit – which has been a better place to be.” 

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