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Pension Advisory Board: Divesting From Fossil Fuels Will Harm Future Returns

There have been calls from many corners in recent months and years for pension funds and other institutional investors to begin divesting from fossil fuel-based investments.

But not many institutional investors have heeded that call, choosing instead to use their sway as major shareholders to work with companies.

One of the largest asset holders in the world is taking a similar approach. The board of the $857.1 billion Norway Pension Fund Global has told the fund that divesting from fossil fuels would be an unwise financial decision that would reduce returns.

Survey: Institutional Investors Often Driven Towards Short-Term Thinking

Previous surveys have shown that pension funds almost universally consider themselves long-term investors. But their investment decisions, by their own admittance, can often reflect short-term thinking.

A new survey sheds some light on the factors and pressures that cause pension funds to break away from long-term thinking.

Summarized by Chief Investment Officer:

Accounting demands, valuation models, and modern portfolio theory are driving institutional investors towards short-termism, Hermes Investment Management has claimed.

After conducting a survey of more than 100 European investors, the fund manager reported that 44% said external pressures were forcing them away from views in line with their long-term liabilities.

“The short-term factors driving the management of pension schemes require detailed attention,” said Saker Nusseibeh, CEO of Hermes Investment Management. “Schemes need to have the freedom to act and focus on longer term considerations to best serve their end beneficiaries, savers.”

Hermes is owned by the UK’s largest pension, the BT Pension Scheme.

One of the major headaches for investors, the survey found, was quarterly results, with 44% demanding longer-term reporting. Pension accounting measures and triennial valuations were equally admonished by respondents.

This short-term thinking is also taking investors’ eyes away from their roles as good shareholders. Some 37% told the survey they thought focus on short-term investment performance acted to disconnect them from “their responsibilities as owners of actual companies”.

Additional questions were asked about innovation in the asset management industry. Some 42% said they wanted greater innovation around outcome-focussed investing, while 32% wanted better ways to reduce volatility.

More than half—56%—said they wanted innovation around the disclosure of costs.

The survey was conducted with 100 institutional investors from across Europe.

Photo by Santiago Medem via Flickr CC

An Optimist’s View of Long-Termism In Institutional Investing

Investments & Pensions Europe released a survey today indicating that three of every four pension funds consider themselves long term investors. But they disagreed on the specifics of long-termism.

In light of the survey, here’s an article by Theresa Whitmarsh, Executive Director of the Washington State Investment Board, discussing how pension funds can move away from short-termism and improve the dialogue surrounding true long-term investing.

The article was published in the Fall 2014 issue of the Rotman International Journal of Pension Management.

Whitmarsh writes:

While solutions to short-termism proposed for institutional investors vary, they coalesce around three themes: first, disintermediation through direct ownership of private assets; second, concentrated holdings of publicly traded securities with commensurate influence over corporate behavior; and, third, collaboration with other investors to influence market behavior. All three models are being tested and successfully implemented, but not at scale.

There are several sound reasons for this. Disintermediation is not always practical for a globally diversified portfolio. Skilled intermediaries who possess asset class, style, sector, and geography expertise will always be in demand (and, unfortunately, even unskilled ones will remain in demand). And holding a concentrated portfolio of public companies runs counter to what we know about active investing: it is very difficult for an active investor to outperform broad market indexes, and index investing remains an efficient and cost-effective way for institutional investors to put large amounts of money to work. Finally, as mentioned earlier, market and governance reform has fallen short of our goals as investors, despite strong governance-focused collaborations. Intermediaries outnumber us, outspend us on lobbying, and are more financially motivated than us to maintain the short-termist status quo.

So while the benefits of long-termism can be many – harvesting an illiquidity risk premium, providing ballast to the capital markets, and encouraging corporations to invest in innovations that sustain their enterprises and society over time – neither investors nor corporations have a particularly strong record.

However, I am becoming more optimistic that a movement for long-termism is afoot, one that is pulling in corporations and intermediaries and that has the potential to get enough traction to change behavior. This movement comes from deep within the corporate sector and is increasingly supported by important market players. It goes by various names – sustainable capitalism, fiduciary capitalism, inclusive capitalism, conscience capitalism – but no matter the moniker, the goal of all these undertakings is to encourage a brand of capitalism that prices in externalities, broadly benefits society, and ultimately sustains the planet. An initiative co-sponsored by the Canada Pension Plan Investment Board and McKinsey, Focusing Capital on the Long Term,1 involves broad participation from investors, money managers, corporations, and finance academics and will be producing several recommendations on how to take these concepts from idea to practice.

Whitmarsh on the three catalysts that she believes will spur long-term investing:

I see three catalysts for the increasing dialog on the benefits of long-termism – the first two self-serving of the market, though not without benefit to society, and the third essential to our survival as a species.

The first catalyst is the need to restore trust in the capitalist system. Trust was one of the main casualties of the Great Recession, according to Christine Lagarde, Managing Director of the International Monetary Fund, who spoke at the Conference on Inclusive Capitalism in London on May 27, 2014.2 Lagarde noted that in a recent poll conducted by the Edelman Trust Barometer, less than one-fifth of those surveyed said they believe that business or government leaders will tell the truth about important issues. This should be a wake-up call, she told her audience; trust is the lifeblood of the modern business economy. The way to restore trust, according to Lagarde, is to ensure that growth is more inclusive, favoring the many, not just the few. She shared a startling statistic: the richest 85 people in the world hold more wealth than the poorest 3.5 billion.

This leads us to the second catalyst: increasing recognition of the negative effect of rising income inequality, in both developed and emerging markets, on the pace of growth. The most unlikely signal that this issue has gone mainstream came in early August, when Standard & Poor’s (2014) published a report that correlates the rise of income inequality in the United States with dampening GDP growth.

The last catalyst is the threat of carbon-emission-induced climate change. Market economies do not price in externalities well, but carbon emissions have to count as potentially the most costly externality ever encountered. (To my mind, only nuclear weapons production comes close.) Even the most self-serving capitalist wants a world in which to keep making money.

Perhaps, with capitalism in crisis, trust in the finance sector at an all-time low, and growing concerns about what we are doing to our planet, we just may – as a society, and collectively as investors – be willing to act.

We have reason to be optimistic that we will act, according to economist Larry Summers. Speaking at the same event as Lagarde, he noted, “This idea that capitalism is about to fail is one we have seen before, and yet it has been a triumph of the capitalist system that it has proven remarkably resilient; that it has given rise to what might be called self- denying prophecies, prophesies of doom that lead to adjustments that lead to repair.”

The entire piece can be read here.

Photo by Santiago Medem via Flickr CC

Surveys: Institutional Investors Disillusioned With Hedge Funds, But Warming To Real Estate And Infrastructure

Two separate surveys released in recent days suggest institutional investors might be growing weary of hedge funds and the associated fees and lack of transparency.

But the survey results also show that the same investors are becoming more enthused with infrastructure and real estate investments.

The dissatisfaction with hedge funds — and their fee structures — is much more pronounced in the U.S. than anywhere else. From the Boston Globe:

Hedge funds and private equity funds took a hit among US institutions and pension managers in a survey by Fidelity Investments released Monday.

The survey found that only 19 percent of American managers of pensions and other large funds believe the benefits of hedge funds and private equity funds are worth the fees they charge. That contrasted with Europe and Asia, where the vast majority — 72 percent and 91 percent, respectively — said the fees were fair.

The US responses appear to reflect growing dissatisfaction with the fees charged by hedge funds, in particular. Both hedge funds and private equity funds typically charge 2 percent upfront and keep 20 percent of the profits they generate for clients.

Derek Young, vice chairman of Pyramis Global Advisors , the institutional arm of Fidelity that conducted the survey, chalked up the US skepticism to a longer period of having worked with alternative investments.

“There’s an experience level in the US that’s significantly beyond the other regions of the world,’’ Young said.

A separate survey came to a similar conclusion. But it also indicated that, for institutional investors looking to invest in hedge funds, priorities are changing: returns are taking a back seat to lower fees, more transparency and the promise of diversification. From Chief Investment Officer:

Institutional investors are growing unsatisfied with hedge fund performance and are increasingly skeptical of the quality of future returns, according to a survey by UBS Fund Services and PricewaterhouseCoopers (PwC).

The survey of investors overseeing a collective $1.9 trillion found that only 39% were satisfied with the performance of their hedge fund managers, and only a quarter of respondents said they expected a “satisfying level of performance” in the next 12-24 months.

[…]

The report claimed this showed a change in expectations of what hedge funds are chosen to achieve. Investors no longer expect double-digit returns, but instead are content to settle for lower fees, better transparency, and low correlations with other asset classes.

Mark Porter, head of UBS Fund Services, said: “With institutional money now accounting for 80% of the hedge fund industry, they will continue seeking greater transparency over how performance is achieved and how risks are managed, leading to increased due diligence requirements for alternative managers.”

Meanwhile, the USB survey also indicated investors are looking to increase their allocations to infrastructure and real estate investments. From Chief Investment Officer:

“Despite the challenges of devising investment structures that can effectively navigate the dynamic arena of alternative markets, asset managers should remain committed to infrastructure and real assets which could drive up total assets under management in these two asset classes,” the report said.

“This new generation of alternative investments is expected to address the increasing asset and liability constraints of institutional investors and satisfy their preeminent objective of a de-correlation to more traditional asset classes.”

The report noted that despite waning enthusiasm for hedge funds, allocations aren’t likely to change for the next few years.

But alternative investments on the whole, according to the report, are expected to double by 2020.

How Confident Are Institutional Investors Right Now?

The results of a recent survey, conducted and released by Pyramis, indicate that institutional investors are more confident than ever about their investment returns.

But funds in Asia and Europe are much more optimistic about market volatility than their counterparts in Canada and the U.S.

The survey of 811 pension fund managers found that Canadian pension funds were the most pessimistic of the bunch about future markets.

From Chief Investment Officer:

Despite the return of volatility, confidence in meeting investment goals has resurged as more than nine in 10 institutional investors said they would hit their targeted returns.

Some 91% of 811 investors told a survey, run by fund manager Pyramis, they believed their goals would be hit over the next five years, a large increase on the 65% who said the same in the company’s 2012 survey.

“While the travails of 2008 are far back enough for investors to feel significantly more confident that they will hit their five-year investment targets for their assets, they still remain concerned that there will be a return to volatility, as has been the case in recent weeks,” said Nick Birchall, head of UK institutional business at Fidelity Worldwide Investment, which distributes Pyramis’ products outside North America.

[…]

Volatility cast the longest shadow on institutional investors, according to the survey. Some 22% cited it as their top concern, while investors in the UK were the most nervous, with 31% saying it was their biggest worry.

However, their peers in the US were also concerned by erratic market moves.

Just 7% of US investors agreed with the following statement: “Volatility is decreasing and market bubbles/crashes will become less frequent.”

Some 10% of their Canadian neighbours agreed, while European and Asian investors took the opposite view, with 79% and 91% respectively thinking the statement was dead on the money.

It’s important to note that the survey was conducted back in June, before recent bouts of market volatility.

Canadian pension funds showed some impressive clairvoyance, as they were by far the most pessimistic of the group back in June: 6 out of 10 Canadian respondents said they anticipated increased market volatility in the near future.

From the Business News Network:

The survey, conducted in June and July, found 60 percent of Canadian pension fund managers believe that over the long term, “volatility is increasing and market bubbles/crashes will become more frequent,” while 42 percent in the U.S. agreed with the statement. However, only 4 percent of pension managers in Europe and 5 percent in Asia agreed volatility is increasing.

The survey included 90 Canadian pension funds representing about 25 percent of all pension plan assets in Canada, Pyramis said.

Mr. Young said he believes the findings reflect the broader global focus of Canadian pension funds, saying funds in other regions are often more inward-looking and focus more on their regional markets. They may have responded based on a consideration of their own local economies, while Canadian pension funds may have been assessing the volatility more broadly in all major markets, he said.

“I do believe that Canada has a very unique and global perspective compared to most countries,” [Pyramis vice-chairman] Mr. Young said.

Inside Arkansas Pension’s Farmland Portfolio

Money managers, venture capitalists and institutional investors are increasingly donning their straw hats and getting to work in rural America.

Investments in farmlands have been on the rise. The Arkansas Teachers’ Retirement (ATRS) System, for example, has invested $73 million in farmland in the last four years.

Arkansas Business takes a peek inside ATRS’ rural investments:

“To us, farmland is like a pure Arkansas-flavored investment,” said George Hopkins, ATRS executive director. “Our only regret is that we weren’t there 10 years ago.”

The state’s largest pension fund has invested about $73 million in 14,580 acres of cropland since it began building its roster of farm holdings four years ago.

ATRS owns nine farm properties scattered from Indiana to Idaho and from Wisconsin to Florida.

The May acquisition of Dawson Farms added a new crop to a roster that includes organic oranges, sugar beets, barley, alfalfa, kidney beans and popcorn as well as mainstays such as rice, wheat, corn and soybeans.

ATRS intends to allocate up to 1 percent of its nearly $14.7 billion-asset investment portfolio to agriculture property.

“We think that’s 1 percent that will provide quality returns over time,” Hopkins said.

The agri properties are a subset of the pension fund’s $1.6 billion real estate segment. The biggest chunk of that is almost $1.2 billion worth of retail, office, industrial and apartment investments. Timber property accounts for about $347 million more.

ATRS has adopted the low-risk role of landlord with its farm investments. Purchased for cash, the properties are leased for crop production that generates a reliable flow of income.

Why farmland? ATRS explains:

ATRS officials began to explore agriculture property as an avenue to further diversify its investments in early 2010.

“It’s not uncommon for people to ask us to look at doing this or doing that and investing with them,” Hopkins said. “Along the way, we were asked, ‘Have you ever thought about investing in agriculture?’

“After a while it became clear we needed to be investing in farmland. It’s a great inflation hedge, a slow and steady performer that is outside the stock market.”

Here’s a summary of ATRS’ farmland portfolio:

	Investment	Acres	Primary Crops
Bridge Farm, Idaho	$16.2 million	4,241	Barley, sugar beets
Dundy Farm, Nebraska	$11.8 million	2,317	Wheat, corn, kidney beans, popcorn
Darlington Ridge Farm, Wisconsin	$10.9 million	1,537	Alfalfa, corn
Duvall Farm, Cross County	$9.9 million	2,801	Soybeans, rice
Dawson Farms, Louisiana	$8.2 million	1,596	Sweet potatoes, corn, soybeans
80 Foot Road Grove Farm, Florida	$6.6 million	463	Organic oranges
Wright Farm, Indiana	$5.8 million	854	Corn, wheat
Miller Farm, Prairie County	$3.1 million	771	Soybeans, rice
Total	$73.2 million	14,580

Photo credit: Arkansas Business

Deutsche Bank: CalPERS’ Hedge Fund Exit “Has No Bearing” On Allocations Of Institutional Investors

The CalPERS Building in West Sacramento, California.

Deutsche Bank says that after a series of meetings this month with institutional investors, they’ve concluded that CalPERS’ hedge fund exit “has no bearing on most investors commitment to the industry.”

From ValueWalk:

Deutsche Bank prime brokerage notes that hedge funds have been engaged in “extreme protection buying in equities” and said that the recent exit from hedge funds by CalPERS “has no bearing on most investors commitment to the industry.”

After speaking with the institutional investor community regarding their commitment to maintain their hedge fund allocations, Deutsche Bank’s Capital Introductions group reports this positive message that it says was bolstered by recent meetings with Canadian pensions and global insurance companies throughout the month, while a trip to Munich indicated an increase in hedge fund exposure from institutions.

[…]

Separate hedge fund observers, meanwhile will be watching numeric asset flow patterns in December and the first quarter of 2015 to determine on an objective basis if there has been a statistical move away from hedge funds.

Even if institutional investors on the whole aren’t moving away from hedge funds, the exit by CalPERS – and the public debate swirling around the investment expenses associated with hedge funds – has forced some hedge funds to reconsider their fee structures. From the Wall Street Journal:

Two titans of the hedge-fund and private-equity world say they are growing more open to reducing fees in the face of rising scrutiny of the compensation paid to managers of so-called alternative investments.

[…]

Mr. [John] Paulson [founder of hedge fund firm Paulson & Co.] said he feels “pressure” to act in the wake of “enormous numbers in compensation” for hedge fund managers. Mr. Paulson, 58, earned a reported $2.3 billion last year, counting both fees and the appreciation of his own personal investment in his funds.

“Institutions are becoming a little more demanding…they are putting pressure on the management fee and the incentive fee,” he said Monday during a panel discussion at New York University’s Stern School of Business.

Joseph Landy, co-CEO of $39 billion buyout shop Warburg Pincus, echoed Mr. Paulson’s experience.

“There are a lot of private-equity managers out there who can make a lot of money before they return a dime to investors,” Mr. Landy said. “Most of the pressure [to reduce fees] has been on the actual annual management fee.”

Neither he nor Mr. Paulson, however, were too concerned about any widespread threats to their businesses.

“We came out relatively unscathed from the crisis. We’re doing pretty much the same things we did as before [with] very little restrictions on how we invest the money,” Mr. Paulson said.

Paulson said he think more hedge funds will start using “hurdles”, a fee structure which prevents managers from collecting performance fees until they’ve met a certain benchmark return.

Photo by Stephen Curtin

Fiduciary Capitalism, Long-Term Thinking and the Future of Finance

John Rogers, CFA, penned a thoughtful article in a recent issue of the Financial Analysts Journal regarding the future of finance – and how pension funds and other institutional investors could usher in a new era of capitalism.

From the article, titled “A New Era of Fiduciary Capitalism? Let’s Hope So”:

From my perspective, a new era of capitalism is emerging out of the fog. What I define as fiduciary capitalism is gathering strength and needs to become the future of finance. An era of fiduciary capitalism would be one in which long-term-oriented institutional investors shape behavior in the financial markets and the broader economy. In fiduciary capitalism, the dominant players in capital formation are institutional asset owners; these investors are legally bound to a duty of care and loyalty and must place the needs of their beneficiaries above all other considerations. The main players in this group are pension funds, endowments, foundations, and sovereign wealth funds.

Fiduciary capitalism has several attractive traits. It encourages long-term thinking. As “universal owners,” fiduciaries foster a deeper engagement with companies’ management teams and public policymakers on governance and strategy. In textbook terms, they seek to minimize negative externalities and reward positive ones. Because reducing costs is easier than generating alpha, we can expect continued pressure on financial intermediaries to reduce costs. To be sure, there are considerable gaps to bridge between today’s landscape and fiduciary capitalism. Transparency and disclosure, governance of fiduciaries, agency issues, and accountability are all areas that need more work.

On barrier in the way of fiduciary capitalism: lack of transparency. From the article:

Too many institutional investors are secretive and do not disclose enough about their activities. Their beneficial owners (including voters, in the case of sovereign funds) need more information to make reasonable judgments about their operations. Similarly, far more transparency is needed in the true costs of running these pools of assets. Investment management fees and other expenses often go unreported. Too much time and energy is spent comparing returns with market benchmarks, and not enough is spent defining and comparing the organizations’ performances against their liabilities—or against adequacy ratios.

Pension governance itself needs to be improved. As Ranji Nagaswami, former chief investment adviser to New York City’s $140 billion employee pension funds, has observed, public pension trustees are often ill equipped to govern platforms that are effectively complex asset management organizations. Compensation remains a complicated issue. In the public sector, paying for great pension staffers ought to be at least as important as a winning record on the playing field, yet in 27 of the 50 US states, the highest-paid public employee is the head coach of a college football team.

Rogers concludes:

The future of finance needs to be less about leverage, financial engineering, and stratospheric bonuses and more about efficiently and cleanly connecting capital with ideas, long-term investing for the good of society, and delivering on promises to future generations. In the public policy arena, governments that promote long-term savings, reduce taxes on long-term ownership, and require transparency and good fiduciary governance can help hasten this welcome change in our financial markets.

The era of finance capitalism wasn’t all bad, and an era of fiduciary capitalism wouldn’t be all good. In a time when leadership in finance is desperately lacking, fiduciaries have the potential to reconnect financial services with the society they serve. Let’s hope it’s not too late.

Read the entire article, which is free to view, here.

CalSTRS: Financial Risk of Climate Change “Very Real” For Institutional Investors

CalSTRS has been one of the most active (and vocal) pension funds in the world this year when it comes to exploring the financial risk of climate change.

The fund announced last month it was joining forces with Mercer and a handful of other pension funds to study the market impact of climate change.

Now, CalSTRS has commented on a new report showing the “profound lack of preparedness” for climate change among the nation’s insurance companies.

The pension fund calls for institutional investors to be “more mindful of market exposures to environmental risks.”

From a CalSTRS release:

The Insurer Climate Risk Disclosure Survey Report & Scorecard: 2014 Findings & Recommendations was released today by Ceres, a nonprofit sustainability organization mobilizing business and investor leadership on climate change and other sustainability challenges, ranks property & casualty, health, and life & annuity insurers that represent about 87 percent of the total U.S. insurance market. Ceres found strong leadership on the issue in fewer than a dozen companies nationwide.

“Environmental, social and governance risks and issues such as climate change are very real for CalSTRS. This new report enables large institutional investors to be more mindful of market exposure to environmental risks through our insurance investments,” said CalSTRS Chief Executive Officer Jack Ehnes. “More importantly, the report gives us better perspective on how well, or not, insurance companies are responding to climate change risk.”

The report states, “… insurers are on the veritable ‘front line’ of climate change risks, and there is compelling evidence that those risks are growing. Rising sea levels and more pronounced extreme weather events will mean increasingly damaging storm surges and flooding. Hurricane Sandy alone resulted in over $29 billion in insured losses.”

“Meaningful change in the recognition of climate risk to the investment portfolio will come from an alignment of interests, and who better to take leadership this effort than the insurance industry,” added Ehnes. “The foundation of the insurance model is based on risk analysis, so ignoring the risk of climate changes seems most imprudent. Clearly, more action on the part of the insurance sector is needed.”

Last month, CalSTRS announced plans to double down on its clean energy investments.

Some Pension Funds Want Longer Private Equity Deals; Funds Bypassing PE Firms To Avoid Fees

Private equity investments typically operate on a five-year timeline. But some pension funds are talking with private equity firms about longer-term deals. And at least one pension fund is cutting out the middleman and buying companies outright to avoid fees.

Reported by the Wall Street Journal:

Canada Pension Plan Investment Board is “open to conversations” with private-equity firms about partnerships to buy and hold companies for longer than the traditional five-year investment period, said Neal Costello, a London-based manager at the C$227 billion ($203 billion) pension fund.

Blackstone Group LP and Carlyle Group LP are among private-equity firms exploring how they can do longer-term deals with investors such as CPP and sovereign-wealth funds, people familiar with the firms have said.

Such deals could represent a major shift in the private-equity industry. The firms may use their own balance sheets rather than their funds to buy large companies with investors, people have said.

[…]

Large institutional investors are balking at paying expensive private-equity fund fees, and they are seeking to hold investments for longer. CPP is already buying companies outright, in addition to investing in private-equity funds and taking direct stakes alongside those funds. Earlier this year, it bought insurance company Wilton Re for $1.8 billion.

“That’s a very long-term asset,” Mr. Costello said Thursday at a conference in London organized by the British Private Equity and Venture Capital Association. “We can look at a 20-year investment period.”

Universities Superannuation Scheme, a London-based pension manager of £42 billion ($67.6 billion), would also consider longer-term deals in partnership with private-equity firms, according to Mike Powell, head of the private markets group at USS Investment Management.

“If we find good assets, we want to hold on to them as long as we can,” Mr. Powell said in an interview at the conference.

USS has already bypassed private equity and other fund managers entirely: It owns direct stakes in London’s Heathrow Airport and NATS, the U.K.’s air traffic service. Investing directly in infrastructure projects and companies is a way of avoiding paying high fees to fund managers, Mr. Powell said.

One problem that arises with a longer timeline is the issue of fees; most pension funds would balk at the additional expenses that accompany PE partnerships longer than five years. From the WSJ:

An obstacle to doing longer term deals with private-equity firms is figuring out how to pay the deal makers for such transactions, Mr. Powell said. Private-equity firms typically charge an annual fee of between 1% and 2% and keep 20% of profits when they sell a company, a model that won’t work if assets are held for many years.

“How do we remunerate them over the long term?” Mr. Powell said. “That’s up to Carlyle and Blackstone to come up with the answer.”

Ontario Municipal Employees Retirement System, a Canadian pension manager, has stopped investing in private-equity funds to avoid paying their fees, Mark Redman, the European head of its private-equity group said at the conference. The pension fund is buying companies directly instead.

The switch will benefit the pensions of the Canadian workers such as firefighters and policemen by saving them money, Mr. Redman said.

“The amount of fees that we were paying out for a fund, 2 and 20 [percentage points] and everything that goes with that, was a huge amount of value that we were losing to the fund,” Mr. Redman said. “If we could deliver top quartile returns and we weren’t hemorrhaging quite so much in terms of fees and carry that would mean that we would be able to meet the pension promise.”

Pension funds might have some leverage here — Pension360 has previously covered how PE firms want more opacity in their dealings with pension funds. The firms have been upset about the amount of private equity information disclosed by pension funds as part of public records requests.

Photo by 401kcalculator.org

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