Some of the world’s largest pensions, endowments and hedge funds met in Boston today to discuss the future of the “absolute return” industry.  Joining them were leading academics such as Stanford’s Myron Scholes and Wharton’s Sandy Grossman, hedge fund managers such as Michael Huttman, the Chairman of Millennium Global Asset Management, one of the world’s largest currency hedge funds and the heads of European and US public pensions and university endowments.

This, just as the FT reported on the historical challenges facing these investors:

“Public pension funds in US states are facing their worst year of losses in history, exacerbating existing funding shortfalls and putting pressure on government to shore them up.”

Jokes abounded today about how the asset figures printed in the 2-month-old program now needed to be adjusted downward by 20% (or much more for funds denominated in Canadian and Australian dollars).  But despite not having received “absolute” returns from their hedge fund managers this year, the pensions and endowments here were actually very sanguine about the future of alternative investments.

Although the day involved panel discussions on topics ranging from the “endowprise” (an emerging form of endowment management) to the future of the funds-of-funds industry, a number of common themes arose…

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