$35B Hedge Fund Manager's Secret: Do Nothing

Nevada's Steve Edmundson is a rare find in the investment world
By Jenn Gidman,  Newser Staff
Posted Oct 20, 2016 6:35 PM CDT
$35B Hedge Fund Manager's Secret: Do Nothing
Throw all this mess out the window (if you're Steve Edmundson).   (Getty Images)

If your visions of high-profile hedge fund managers include frenetic scrambling through paperwork, fielding endless phone calls, and scouring the Internet during never-ending workdays, those don't apply to Steve Edmundson, the investment head of Nevada's $35 billion Public Employees' Retirement System, the Wall Street Journal notes. Where other states' retirement systems try to come up with the most complex investments possible to beat the markets, the 44-year-old Edmundson has a different philosophy when it comes to day-to-day trading: "Do as little as possible, usually nothing," as the Journal puts it. And by "nothing," that means not obsessing over the daily fluctuations in oil prices, the elections, or even what Janet Yellen is up to—an approach that's rare among managers of large pension funds, the New York Times noted last year in an article about Edmundson.

This laissez-faire tactic has served Edmundson well: His system's returns over anywhere from one to 10 years are competitive, if not better, than the pension systems of other states, including the largest public one—California's. Even Edmundson's desk looks like it's his first day on the job, with just basic office supplies, a few family pics, and a printer—no fancy Bloomberg Terminal to monitor real-time market info. Edmundson is able to kick back by keeping the system's stocks and bonds in low-cost index funds, though one investment strategy expert (who held the job before Edmundson) concedes "doing nothing is harder than it looks" when it comes to showing such restraint. Edmundson's minimalist philosophy even carries over to lunch: He brings leftovers or a sandwich from home so he doesn't have to spend $10 each day. (A typical Steve Edmundson day, in the Wall Street Journal.)

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