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2A THE DAILY ASTORIAN • WEDNESDAY, DECEMBER 30, 2015 2UHJRQLQYHVWPHQWRI¿FLDOV stick with hedge funds Lotteries OREGON Tuesday’s Pick 4: 1 p.m.: 8-3-0-6 4 p.m.: 9-4-3-1 7 p.m.: 1-9-5-4 10 p.m.: 3-4-9-3 WASHINGTON ‘What is your New Year’s resolution?’ Tuesday’s Daily Game: 0-2-1 Tuesday’s Keno: 01- 07-10-12-17-18-22-25-26- 31-33-36-38-51-54-56-64- 66-68-77 Tuesday’s Match 4: 01-06-10-20 Tuesday’s Mega Mil- lions: 20-25-55-62-74, Mega Ball: 7 Estimated jackpot: $117 million. “To get my A1C — three months’ check of blood sugar — in shape.” Jim Dickson, Astoria Memorial Saturday, Jan. 2 LAYTON, Mildred La- Vonne (Jones) — Memo- rial at 2 p.m., First Baptist Church of Astoria, 349 Seventh St. “I don’t have one yet. I like to pro- crastinate. I haven’t even thought about it — maybe because I think it’s silly, now that I’m older.” Brian Gustafson, Astoria On the record DUII arrest • At 2:06 a.m. Sun- day, Clatsop County Sheriff’s Office arrest- ed Stephen Bokor, 27, of Astoria, for driving under the influence of intoxicants on U.S. Highway 30 and Liberty Lane in Astoria. “To be the best grandma I can be.” Nora Crawford, Astoria ® ACCUWEATHER FORECAST FOR ASTORIA Astoria 5-Day Forecast Tonight Clear and cold 29° Thursday Oregon Weather Shown is tomorrow’s weather. Temperatures are tonight’s lows and tomorrow’s highs The Dalles 25/33 Astoria 29/44 Portland 28/38 Corvallis 25/39 Eugene 24/39 Pendleton 16/23 Salem 24/40 Albany 23/39 Ontario 10/20 Bend 13/24 Friday Burns -1/14 Medford 23/42 Mostly sunny Klamath Falls 8/23 Plenty of sunshine Forecasts and graphics provided by AccuWeather, Inc. ©2015 44° 30° Saturday 33° Sunday Plenty of sunshine 45° 45° 32° Plenty of sunshine 45° 33° Almanac Sun and Moon Astoria through Tuesday. Temperatures High ........................................... 45° Low ............................................ 37° Normal high ............................... 48° Normal low ................................. 37° Precipitation Yesterday ................................ 0.19" Month to date ........................ 20.34" Normal month to date ............. 9.28" Year to date ........................... 73.58" Normal year to date .............. 66.65" Sunset tonight .................. 4:38 p.m. Sunrise Thursday ............. 7:58 a.m. Moonrise today ............... 10:36 p.m. Moonset today ............... 10:57 a.m. Regional Cities City Baker City Bend Brookings Eugene Ilwaco Klamath Falls Medford Newport North Bend Today Hi Lo W 22 2 c 28 13 c 49 34 pc 42 24 c 44 36 pc 32 8 c 45 23 c 44 31 pc 50 34 pc New First Full Jan 1 Jan 9 Jan 16 Jan 23 Under the Sky Hi 17 24 48 39 44 23 42 42 51 Thu. Lo 0 9 32 21 38 4 21 32 34 Hi 60 46 28 23 21 34 48 34 82 32 30 49 65 50 83 49 59 51 40 50 37 25 51 38 54 Thu. Lo W 45 pc 32 pc 14 c 6 s 10 pc 25 sf 34 c 16 pc 68 s 22 c 13 pc 30 s 41 s 35 pc 73 pc 31 pc 50 sh 37 pc 23 pc 36 pc 24 pc 7 pc 36 s 27 s 37 pc W s s s s s s s s s National Cities Today City Hi Lo W Atlanta 67 52 r Boston 36 36 c Chicago 31 23 sn Denver 24 7 pc Des Moines 27 9 sf Detroit 35 28 c El Paso 45 27 s Fairbanks 35 18 pc Honolulu 81 70 pc Indianapolis 37 26 c Kansas City 29 15 pc Las Vegas 48 30 s Los Angeles 63 40 s Memphis 52 37 pc Miami 83 75 pc Nashville 56 35 c New Orleans 63 54 t New York 49 45 r Oklahoma City 38 25 pc Philadelphia 54 44 r St. Louis 39 25 c Salt Lake City 30 12 sn San Francisco 51 38 pc Seattle 39 27 pc Washington, DC 56 45 r Last City Olympia Pendleton Portland Roseburg Salem Seaside Spokane Vancouver Yakima Today Hi Lo W 38 21 pc 28 16 c 41 28 pc 47 29 c 41 24 c 44 34 pc 22 11 c 39 25 pc 29 16 c Hi 37 23 38 42 40 44 21 37 27 Thu. Lo 20 12 26 27 23 34 5 23 10 W s c s s s s c s c Tonight's Sky: The Winter Circle - Sirius is the brightest star in the night sky followed by Capella, Rigel, Procyon, Betelgeuse, Aldebaran and Pollux. Source: Jim Todd, OMSI Tomorrow’s Tides Astoria / Port Docks Time High 5:29 a.m. 8.3 ft. 5:09 p.m. 7.2 ft. Time 11:29 a.m. 11:28 p.m. Low 2.9 ft. 1.6 ft. Tomorrow’s National Weather Fronts Cold Warm Stationary Showers T-Storms -10s -0s 0s 10s 20s 30s 40s 50s 60s 70s 80s 90s 100s 110s Rain Flurries Snow Ice Shown are noon positions of weather systems and precipitation. Temperature bands are highs for the day. Forecast high/low temperatures are given for selected cities. Weather (W): s-sunny, pc-partly cloudy, c-cloudy, sh-showers, t-thunderstorms, r-rain, sf-snow fl urries, sn-snow, i-ice. Need a Lift? Roby’s can help. Lift chairs starting at $599. Side pocket to keep remote control handy at all times Battery support ensures lift mechanism works for one cycle without electricity. Available in a wide selection of fabrics and special-order fabrics ZERO GRAVITY device that supports legs, back, and neck Astoria - (503) 325-1535 1555 Commercial • www.robysfurniture.com OBITUARY POLICY The Daily Astorian pub- lishes paid obituaries. The obituary can include a small photo and, for veterans, a flag symbol at no charge. The deadline for all obituaries is 10 a.m. the business day prior. Obituaries may be edited for spelling, proper punctua- tion and style. Death notices and upcoming services will be published at no charge. Notices must be submitted by 9 a.m. the day of publication. Obituaries and notices may be submitted online at www.dailyastorian.com/forms/ obits, by email at ewilson@ dailyastorian.com, placed via the funeral home or in person at The Daily Astorian office, 949 Exchange St. in Astoria. For more information, call 503-325-3211, ext. 257. Alternatives insulate pension fund from market crashes cited market data that showed hedge fund performance was “highly correlated” with the stock market. As it turns out, other state pension funds have not fol- lowed Calpers’ decision to divest. The California pension By HILLARY BORRUD system cited costs and com- Capital Bureau plexity as reasons for its 2014 decision to exit from hedge 2UHJRQRI¿FLDOVVHDUFKLQJ funds. for ways to blunt the impact Impossible to know of future stock market crashes The Oregon State Treasur- on the state’s $70 billion pen- sion fund have increasingly HU¶V2I¿FHGHFOLQHGWRUHOHDVH looked at hedge funds as part the fee schedules for the three hedge funds in which the of the solution. The state started to buy pension system invested, cit- into the funds in 2011, and ing an exemption in Oregon now has more than $300 mil- public records law. It allows lion invested in them. That’s the agency to keep hidden a small portion — roughly any documents submitted by 0.5 percent — of the pension hedge funds and other private fund’s assets. But under its in- funds not subject to federal vestment policy, the amount disclosures and other regula- could grow. The policy calls tions. As a result, it’s impossible for up to 45 percent of the al- ternatives portfolio, or rough- to know how much the pen- ly 6 percent of the entire pen- sion fund will pay over the sion fund , to be invested in a life of the investments. The category that includes hedge 7UHDVXUHU¶V2I¿FHGLGUHOHDVH aggregate hedge fund fees for funds. 3HQVLRQRI¿FLDOVDUHVWLFN 2014, which suggest the state ing with the strategy, in spite paid 0.27 percent in fees that of recent critiques of pension year on two hedge funds — systems’ investments in the AQR Delta Fund II and AQR funds and the 2014 decision Style Premia Fund — and by the nation’s largest pension 1.07 percent on the third fund, fund, Calpers, to divest from Reservoir Strategic Partners Fund. hedge funds. That is probably a tiny State Treasurer Ted Wheel- er and other members of the portion of what the state will Oregon Investment Council eventually pay, given the typ- hope hedge funds and other ical hedge fund fee structure. Keith Larson, a member of alternative investments will help the state avoid a repeat the Oregon Investment Coun- of what happened in the 2008 cil, said hedge funds typically ¿QDQFLDOFUDVKZKHQWKHSXE charge a 2 percent manage- lic employees’ pension fund ment fee, plus a 20 percent lost a third of its value in six FXWRISUR¿WVZKLFKLVSDUWO\ why the funds have a negative months. The fund has largely re- image. One of the AQR funds had covered from the effects of the crash, but for a variety of a return of 5.6 percent as of other reasons the state now June, while it was too early to faces an $18 billion unfunded calculate a return on the sec- pension liability over the next ond fund, according to a state two decades. The shortfall document. Reservoir Strategic could grow if the state’s in- Partners Fund had a return of vestment returns continue to 3.9 percent which, although it fall short of the 7.5 percent as- was below the state’s assumed sumed rate of return or if there overall pension fund return of 7.5 percent, was not bad com- is an economic downturn. Promise of uncorrelated returns 2UHJRQ SHQVLRQ RI¿FLDOV are most interested in hedge funds’ promise of uncorrelat- ed returns, meaning that the funds will lose less — or per- haps even produce returns — in a down economy. Although research has shown hedge fund performance is correlat- ed to the stock market, Ore- gon has invested in funds with “truly uncorrelated returns,” according to Oregon State Treasury Communications Director James Sinks. “Currently, about 70 cents of every $1 in (pension) ben- H¿WV FRPHV IURP LQYHVWPHQW gains, so sustainable and strong performance is key,” Sinks wrote in an email. In late November, re- searchers at the Roosevelt Institute released a report that examined hedge fund invest- ments by 11 other states. The researchers, who also received support from the American Federation of Teachers and the Haas Institute for a Fair and Inclusive Society at the University of California, %HUNHOH\ IRXQG ³VLJQL¿FDQW correlation” between hedge fund returns and overall pen- sion fund investment perfor- mance. The researchers also ‘We’ve never seen that kind of a global crash of the fi nancial markets like we saw in the last downturn. Usually it was just equities or bonds, it wasn’t everything. But everything went down.’ Katherine Durant Chairwoman of the Oregon Investment Council pared with the state’s actual pension fund return of just un- GHU SHUFHQW GXULQJ WKH ¿UVW 11 months of the year. Strong support Hedge funds enjoy strong support from the Oregon In- vestment Council, which has unanimously supported them every time there was a vote to invest in a new fund. The council’s experience during WKH ¿QDQFLDO FROODSVH helps explain why. The crash revealed that HYHQ ¿[HGLQFRPH LQYHVW ments, such as bonds and oth- er securities, were riskier than LQYHVWPHQWRI¿FLDOVUHDOL]HG “Part of the reason for that was in order to try and achieve a high return for the state, the state had invested in a lot of corporate debt,” Larson said. The pension fund had also invested in mortgage-backed securities, many of which contained high-risk loans that went into default during the housing crisis. Katherine Durant, the chairwoman of the Oregon Investment Council, said the 2008 crash was a pivotal mo- ment. “We’ve never seen that kind of a global crash of the ¿QDQFLDOPDUNHWVOLNHZHVDZ in the last downturn,” Durant said. “Usually it was just eq- uities or bonds, it wasn’t ev- erything. But everything went down.” Larson agreed. “That was a bit of an aha moment,” Lar- son said. “I think the people that were doing the day-to- day investing knew well and good pretty much what we were investing in. We were in- vesting in these turbo-charged assets, that had higher returns but higher risk ... But I think LW ZDV D GLI¿FXOW WKLQJ WR VHH across the entire portfolio, what the effects would be.” Wheeler, who became treasurer in March 2010, said it was important to diversify the state’s pension fund in- vestments so that various in- vestments move in different directions, under different conditions. “In some cases, they can serve as counter- ing forces to economic forc- HV OLNH LQÀDWLRQ´ :KHHOHU said. “In 2008, there was no safe harbor. Everything went down.” Better understand risks Larson said the situation taught him two things: The Oregon Investment Council needed to better understand the risks across investments, and it needed to build a better portfo- lio of alternative investments to prepare for economic down- turns. The state purchased a system to better track assets and risk, and has been working to build the alternatives portfo- lio, which in addition to hedge funds includes investments in funds that own natural resourc- es such as timber and infra- structure such as ports, airports and a power plant. Uncorrelated returns are important to the pension fund because when its value dips, schools and other public em- ployers can end up paying more into the fund. “It’s as much about the un- correlated returns as it is about the high returns,” Larson said of the alternatives portfolio. The Capital Bureau is a collaboration between EO Media Group and Pamplin Media Group. Holy Day of Obligation on Friday The Daily Astorian The Holy Day of Obligation is Friday at St. Mary Star of the Sea Catholic Church, 1465 Grand Ave. A Vigil Mass is being held at 4 p.m. Thursday, and a 10 a.m. Mass takes place on Friday. The Daily Astorian Established July 1, 1873 (USPS 035-000) Published daily, except Saturday and Sunday, by EO Media Group, 949 Exchange St., PO Box 210, Astoria, OR 97103 Telephone 503- 325-3211, 800-781-3211 or Fax 503-325-6573. POSTMASTER: Send address changes to The Daily Astorian, PO Box 210, Astoria, OR 97103-0210 www.dailyastorian.com MEMBER OF THE ASSOCIATED PRESS The Associated Press is entitled exclusively to the use for republication of all the local news printed in this newspaper. SUBSCRIBER TO THE NEW YORK TIMES NEWS SERVICE MEMBER CERTIFIED AUDIT OF CIRCULATIONS, INC. The Knights of Columbus are sponsoring (XFKDULVWLF$GRUDWLRQRQWKH¿UVW)ULGD\RIHY ery month beginning Friday . Starting at 8 p.m., and lasting through the night until 8 a.m. Sat- urday, Knights will be in the church. For infor- mation, or to schedule an hour, call Ray Prom at 503-440-2382. SUBSCRIPTION RATES Effective July 1, 2015 HOME DELIVERY MAIL EZpay (per month) ................$11.25 EZpay (per month) ............... $16.60 13 weeks in advance ........... $36.79 13 weeks in advance ........... $51.98 26 weeks in advance ........... $70.82 26 weeks in advance ......... $102.63 52 weeks in advance ......... $135.05 52 weeks in advance ......... $199.90 Circulation phone number: 503-325-3211 Periodicals postage paid at Astoria, OR ADVERTISING OWNERSHIP All advertising copy and illustrations prepared by The Daily Astorian become the property of The Daily Astorian and may not be reproduced for any use without explicit prior approval. COPYRIGHT © Entire contents © Copyright, 2015 by The Daily Astorian. Printed on recycled paper
