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I wonder if it means "investing" or "spending money on..."

"DiNapoli's office lashed back at the report, saying the comptroller has been reducing hedge fund exposure and paying lower fees."

source:http://www.cnbc.com/2016/10/17/new-york-ripped-for-wasting-money-on-hedge-funds.html

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No, it means "exposure to risk".

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  • Broadly, hedge funds tend to use high risk investment strategies. They often clump these high risk strategies into one fund to "hedge" the risk. If the investments have a 30% failure rate but a 50% return, you'd end up with a net 5% return (100-30 = 70 * 1.5 = 105%) - now ideally the managers can find a way to weed out those 30% that fail and bring it down to 20% (100-20 = 80 * 1.5 = 120% which is a huge improvement!) - an investment that might fail exposes any funds that invested in it to risk. This is the exposure that is being reduced by good fund managers.
    – corsiKa
    Jul 20, 2017 at 17:34

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