Pitchbook: pension funds, private equity and underperformance
Pitchbook recently published an article on push-back pension funds are receiving due to the combination of high fees and low returns with private equity investments.
Pension funds and private equity have had a long, close relationship. As pointed out by PitchBook, it has resulted in issues ranging from conflict of interest at Calpers to investigations of bribery with others.
A key attraction of private equity has been high, stable returns, but that has come under fire as well. Some industry analysts believe that stability is illusory, due to return smoothing.
A tremendous amount of capital has flowed into private investments over the last several years. We suspect issues regarding how returns are calculated and reported will become a larger issue as returns compress.
The full PitchBook article is available here.