By Britt Erica Tunick
Photographs by Jonathan Sprague
Is it any wonder that Kurt Silberstein is frustrated? "I can't stress enough how disappointed we were with what happened in 2008," says Silberstein, the boyish-looking 47-year-old senior portfolio manager who has been running Calpers' hedge fund activities since 2003.
Charged with providing retirement benefits for 1.6 million California public employees, Calpers a decade ago became one of the most vocal proponents of alternative investments, including hedge funds, in the hope that such allocations would bolster its fortunes. Calpers' hedge funds have fared better than its other investments. But last year, the hedge fund portfolio-$7.5 billion at its peak-lost 19%. Not only did the funds lose money, but like many other investors, Calpers found itself unable to get its money back as a result of redemption suspensions or gates. Now, the pension plan is firing hedge fund managers, demanding more control over...