South Carolina goes the direct route

CIO Borden says trimming funds of funds should boost returns, cut costs.

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By Anastasia Donde
Everybody knows you shouldn’t put all your eggs in one basket—but how many baskets should you put them in? There is such a thing as overdiversification, and that worries Bob Borden, chief investment officer of South Carolina Retirement Systems. The $25 billion state fund has exposure to about 350 hedge funds through the $6 billion it has invested in single- and multistrategy hedge funds as well as funds of funds, and Borden is concerned that his alpha is becoming diluted.

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