UCRP has decided to decrease its long-term absolute return allocation from 10% down to 6.5%, as well as its US equity allocation ... the university had made extensive investments in hedge funds by the end of 2009, allocating across Europe-focused event driven equity, relative value credit, event driven credit and global macro.Relative value credit and global macro refer to investment strategies that have made the news lately. Relative value credit involves taking a long position on certain assets while shorting other assets, in the attempt to minimize exposure to market moves. Conversely, a global macro strategy aims to exploit such movements in global financial markets by taking positions in financial derivatives (Soros followed a global macro strategy when he single-handedly brought the British pound to its knees back in 1992).
This might or might not be a sound strategy mix; it is certainly part of the current frenzy to maximize the expected rate of return in order to protect UC's credit rating. But, given that this is our money, should not UC employees have a voice in how the portfolio is allocated?