Too bad there isn't personal criminal and financial liability with no payment of fees or salaries unless the funds make a profit. The investment "advisors" need skin in the game.
If you think the quality of those working in public pensions is questionable (on the official staff/leadership side in places like CalPERS, OPERS, etc.), the quality would really plummet if you started to prosecute merely for losing money.
(akin to Italy criminally prosecuting seismologists for not predicting earthquakes)
Think of what kind of crooks you would attract at that point. Legit folks would stick to the private sphere, and none but conmen or complete idiots would work for public pensions.
(Some might say this has already happened in some systems.)
The issue, of course, is that we don't actually know what the terms are in the committment/side letters for the private assets. That's part of the point. They tell only what was paid after the fact. This may not be appropriate in public funds.
I could get into all the various regulations that do and do not exist in the U.S. investment ecosphere, but I would have to charge.
But in putting together this post, it reminded me I need to update my graph on public pension fund asset allocations... and I may want to expand what I'm graphing. While there has been a general trend of increasing allocation to private assets, not all funds are doing so. Some have been staying away.
Too bad there isn't personal criminal and financial liability with no payment of fees or salaries unless the funds make a profit. The investment "advisors" need skin in the game.
But getting back to what you're getting at:
If you think the quality of those working in public pensions is questionable (on the official staff/leadership side in places like CalPERS, OPERS, etc.), the quality would really plummet if you started to prosecute merely for losing money.
(akin to Italy criminally prosecuting seismologists for not predicting earthquakes)
Think of what kind of crooks you would attract at that point. Legit folks would stick to the private sphere, and none but conmen or complete idiots would work for public pensions.
(Some might say this has already happened in some systems.)
The issue, of course, is that we don't actually know what the terms are in the committment/side letters for the private assets. That's part of the point. They tell only what was paid after the fact. This may not be appropriate in public funds.
I could get into all the various regulations that do and do not exist in the U.S. investment ecosphere, but I would have to charge.
But in putting together this post, it reminded me I need to update my graph on public pension fund asset allocations... and I may want to expand what I'm graphing. While there has been a general trend of increasing allocation to private assets, not all funds are doing so. Some have been staying away.