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Letter: Do our elected officials understand the importance of hedge funds?

Seth Wenig, Associated Press

Now more than ever, our state’s retirees, charities, and college scholarships deserve financial security and certainty. COVID-19 upended long-term growth plans for these organizations, and as we recover from this global pandemic, they are looking to regain their footing after a year lost. We must ensure pensions, nonprofit and university endowments have a clear recovery path. These organizations invest in hedge funds, which play a critical role in their long-term financial stability.

Pensions, endowments and other institutional investors depend on hedge funds, a misunderstood but important aspect of Wall Street, to secure their financial well-being. Hedge funds employ sophisticated market strategies to generate stable, durable returns on investment for entities like Utah Retirement Systems, which invest over $5 billion for 224,290 plan participants. Hedge funds play a crucial role in growing these investments over time, and the gains made from these investments benefit ordinary Americans.

I hope our elected officials recognize and understand this. Recent scrutiny from Washington, D.C., has made it clear that some politicians don’t understand how hedge funds work. Their misguided tax proposals demonstrate a lack of understanding of a simple but important concept: Hedge funds work on Wall Street but deliver for Main Street.

Rane Smith

South Jordan