KKR, Blackstone lose bid to dismiss Kentucky pension lawsuit

KKR, Blackstone Group and the firms’ founders must face a lawsuit alleging they failed to deliver hedge fund returns as advertised, a judge in Kentucky ruled Nov. 30 in a decision that might present new legal challenges for managers of alternative investments.

The lawsuit, filed in December 2017, claims large asset managers misrepresented expensive and risky “black-box” bundles of hedge funds as safe ways to generate high returns. The suit was filed on behalf of the $12.3 billion Kentucky Retirement Systems and state taxpayers. The plaintiffs group includes a sitting judge, a retired state trooper and a firefighter.

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