Following the announcement by the California Public Employees’ Pension Plan ( CALPERS) that they were no longer going to be investing in the investment vehicles known as hedge funds, much debate and press has surfaced about the viability of these types of investments. Hedge funds are investment pools that really began in the 1980s and have experienced huge growth. Initially these pools of capital were designed for wealthy individuals and institutional capital. The funds served two purposes, they offered investors the opportunity for professional management designed to capture some specific market opportunity, and offered the hedge fund manager a new way to earn large management fees that were typically priced as a 2% annual management fee and 20% percent of the profits that were made. Through the 1990s and 2000s hedge funds grew by type and risk but the one thing that became clear was that the term “hedge” in hedge funds had become a misnomer. There were certainly hedge funds that were trying to take volatility out of the market but many others were highly speculative funds where super star managers could place bets on whatever opportunity they saw on a global basis.