Tate lost more than £1m on hedge fund investments according to its annual accounts for 2008-09. The museum’s hedge fund holdings, worth £6.3m in 2008, were sold by March 2009 for £5.2m.
Trustees such as City minister Paul Myners and hedge fund manager Noam Gottesman believed the “risk/return on hedge funds looked less interesting than in other assets”, according to reports in the financial press.
A Tate spokeswoman said: “Tate Foundation’s allocation to hedge funds since 2006-07 was part of the agreed investment policy. The executive committee of the Tate Foundation regularly reviews returns, the state of the market and possible future uses for reserves.
“Following the market changes, the committee decided to redeem the holdings in hedge funds and review our overall investment policy. Our investments experienced a fall in line with general market conditions during 2008-09, but have done quite well in 2009-10, also in line with the market.”