ML-Implode News - Insurers Flee Hedge Funds Amid Slump

The insurer is seeking to redeem $1.2 billion of the $1.8 billion in holdings, a process that may take a couple of years to complete, Chief Investment Officer Steven Goulart said Thursday in a conference call discussing first-quarter results at the New York-based company. The portfolio, which posted negative returns in the quarter, was cut by about $600 million in 2015, he said.
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"It's had up-and-down years and really it's just too inconsistent, we think, in actual performance," Goulart said. "What we'll be left with is a small portfolio of really our most consistently performing managers in hedge funds."
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Competitor American International Group Inc. is also shifting allocations after posting three straight unprofitable quarters. The company said Tuesday that it has submitted notices of redemption for $4.1 billion of hedge-fund holdings through March 31. Average invested assets in hedge funds at AIG were $10.1 billion for the first quarter.

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Insurers Flee Hedge Funds Amid Slump