How Dare Public Pension Funds be allowed to invest in Private Equity Real Estate Funds which have ZERO transparency?

Implications: The Key Implication is this investment behavior is so far over the top and wrong, that its is going to hurt a lot of innocent people and the tax payers. CEO’s of Public Companies have been put in Jail for such bad investment behavior. Furthermore the pension fund managers can’t even report on how their investments are really doing or what they are even invested in as per the subject article. The Politicians have allowed this, so while they cry about the Iraq War, Global Warming and the need to invest in Politically Correct ventures or other hot topics of the day, they dropped the ball big time when they passed legislation which allows for Pension Funds to invest in Private Equity Funds. You have this looming disaster coming along at the very same time as the Baby Boomer Entitlements are about to kick in... This is going to practically bankrupt the United States.

Analysis: This pending disaster is unconscionable period.

Please keep in mind as this rather long article points out, the Public Pension Funds have been allowed to invest in these Private Equity Real Estate Funds only by the consent of State Governments.

The reason they need to get the State Government’s OK is due to the fact the Private Equity Managers demand that their investors execute confidentiality agreements or they won’t permit them to invest.

Public Pensions Funds are not allowed to invest in non transparent investment vehicles unless otherwise authorized.  

One would think that State Governments want to know where their money is being invested and are those investments in the best interests of the public at large never mind protecting those folks who have invested their hard earned money over the years into their public pension funds.

This is why special legislation is required for the Public Pension Funds to invest in Private Equity Funds.  

In this period of many State's having major Budget issues and being under extreme stress and raising taxes of all kinds already, the last thing the taxpayers need is to bail out public pension funds.


This Investment behavior as far as this writer is concerned is not only thoroughly immoral and unethical, but should be criminal as well.  

The investors have no idea what their real returns are and it’s the investors that take the hit if the investment goes bad, not the fund managers who collect their exorbitant fees no matter if they invest or not.  

This should be a scandal like no other as I would suspect that the Pension Fund Managers need to be closely looked at for any kind of “incentives” they may have been provided to be lured into these admittedly high risk investments.  
Why was it not good enough to invest in Public REITS or even buy the Investment Properties Directly or partner with these Private Equity Funds, rather than plunk their money directly into these Private Equity Funds which can not be called into question as you will read?  

This is outrageous and this needs to be brought into the light of day.

Who knows where these investment dollars are winding up, perhaps in the wrong hands? No one knows for sure nor can anyone know based on the rules of the game for Private Equity Investors.

Have the Pension Fund Managers fully disclosed to their pensioners they have invested in  non transparent vehicles and is that OK with them?

Government is supposed to be open about such matters, as these investments should not be treated as National Security Secrets.  

I just hope that Government Watchdogs get on top of this as soon as possible, although its probably too late already.