I went to the monthly investment meeting of the county pension system today interested to see how happy the trustees would be reacting to of all the recent turmoil in the global investment markets. After all, it seems like their rhetoric just gets more positive when times get tougher.

And there were some tough times to talk about. The county has more than $50 million invested with the hedge fund AQR, which recently told investors it experienced some significant losses in July. The fund reportedly lost 13 percent of its value last month. Another hedge fund the county has exposure in, Campbell & Co., lost 13 percent just in July.

One thing I have always loved about observing the local public employee pension funds is the way the rhetoric works. If a pension fund loses money either through its investments or giveaways from elected officials, then we’re all reminded repeatedly that the pension system is built for the long haul and that these “short-term” losses are irrelevant. In fact, it’s downright “hysteria” or irresponsible to focus on short-term losses.

But then, when a local pension fund makes a serious amount of money over a short term, we get press releases and chided for not writing how wonderfully it has performed.

AQR’s loss isn’t anything like the explosion of Amaranth last year, which had taken $175 million from the county pension fund. County officials claimed they had been defrauded by Amaranth and they’re struggling to get the money back.

Amaranth was cagey and not very responsive to questions after its troubles. Today, however, a representative from the Greenwich, Conn.-based AQR was in San Diego. He was joined over the intercom by AQR’s David Kabiller.

The first thing Kabiller said was that his AQR’s investments were up more than “a percent” just today and that it was one of the firm’s best days of the month — so much for not caring about short term results.

As was pointed out again today, hedge funds manage 20 percent of the county pension system’s $8 billion portfolio. There’s been a lot of doom and gloom predictions that a significant number of hedge funds would be wiped out by the credit crisis the investment markets are obsessing over.

But it was nothing but optimism at the county pension board meeting.

“What we’re witnessing is another historical event for great opportunistic investors,” said trustee Laura DeMarco.

Kabiller, from AQR, was just as excited about the possibilities. He and the county’s hedge fund adviser lobbied the board not to call in their bets, but to take advantage of investment opportunities that were opening up with the turmoil.

“You-slash-us happen to put ourselves in a position to take advantage of some of these dislocations,” Kabiller said.

Sounds great.

SCOTT LEWIS

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