US Pensions Invested $1.5 Trillion in Hedge Funds Last Year

US pension funds, endowments, and foundations channelled more than $1.5 trillion into hedge funds last year to help fund retirements, scholarships, and charitable causes, new data shows.

Meanwhile, private credit funds delivered over $1 trillion in direct loans to support business growth, innovation and job creation, according to research by New Investing in Opportunities.

The report said pensions, foundations, and endowments are turning to private credit and hedge funds to diversify portfolios, manage risk, and deliver steady returns.

This strategy has gained popularity nationwide, with Americans in all 50 states benefiting from the gains. In Arizona alone, pension funds have invested $5.4 billion in hedge funds to help support retirees.

Meanwhile, in North Carolina, nonprofits rely on the $13.5 billion invested in hedge funds to fund essential programs and research, and in Massachusetts, colleges and universities have committed $37.5 billion to hedge funds to help provide scholarships and expand educational opportunities.

In addition, private credit direct lending continues to play a crucial role in supporting business growth across the country by providing capital to help companies hire, innovate, and expand.

In Texas, businesses received $74.9 billion from private credit funds to scale operations. Illinois firms used $32.9 billion to recruit and train employees, while in Georgia, $19.2 billion supported innovation and development.

Bryan Corbett, MFA President and CEO, said:  “Private credit and hedge funds invest trillions of dollars in the American economy. They generate returns for pensions, foundations, and endowments, and provide businesses with the capital needed to grow, innovate, and create jobs.

“Private credit and hedge funds strengthen America’s public and private capital markets and drive economic growth.”