However much anyone is shocked, they really shouldn’t be. That’s because the high cost of hiring outside money managers to oversee the city’s retirement assets was entirely predictable. As Bloomberg reported in 2013, New York City is “the only one of the 11 biggest U.S. public-worker pensions that refuses to manage any assets internally.” That alone suggests that the city is paying disproportionately high fees compared with pensions that manage some or all of their funds in-house.
The highest cost investments the city has are its $9.72 billion in private equity and $3.34 billion in hedge funds. The $160 billion retirement system pays fees of more than $360 million a year to outside money managers. That’s a big deal.
But a big surprise? Not even close.
Continues here: Hey New York, Check Out Calpers
“I’m shocked, shocked to find that gambling is going on in here!”
These funds made no money!@#@! – how do they not sue for non performance.
Why don’t these pension funds simply invest in index funds that have low fees a the best returns? Isn’t that what you are always telling us.
Too bad Lifetime cable channel doesn’t develop a whole series of movies about private equity, hedge funds, pension funds, etc. Think of the material!!!
Need I ask about the political connections of those hedge fund managers?