Private equity flops leave institutional investors vulnerable to sell-off


Good returns: People on a ferry in San Francisco Bay, California. The state’s Teachers’ Retirement System with US$341.4bil of assets reported an 8.4% return, bolstered by a 19% gain for public equity investments. — AFP

WASHINGTON: The slump in private equity returns in recent years has pushed US pensions and endowments to lean on an old and familiar investment: stocks.

Large public pension funds, including California Public Employees’ Retirement System, Alaska Permanent Fund and the Teacher Retirement System of Texas, and endowments at Ivy League schools such as Columbia University, have become heavily reliant on public market investments to both bolster performance and free up cash.

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