How Institutional Investors Can Make Money in Private Equity
|Apr 10th, 2012 | Filed under: Alpha Strategies, Institutional Investing, Private Equity, Today's Post | By: AAA Staff||
By Scott Blythe
The New York Times recently printed a scathing article on the performance of the alternative investments sought by some public-sector pension plans to diversify away from bonds paying nest to nothing and stocks that have become increasingly volatile.
It looks like the pension funds are worse off than if they had stuck to vanilla bonds and stocks, not least because of the management fees they pay to alternative investment managers.
Yet, there may be a way to reap the alternative investment premium – which for most large pension plans is not a skill premium but instead an illiquidity premium. Perhaps there are lessons to be learned from large Canadian public-sector pensions plans.
To continue reading this article please login (at the right) or click here to learn more about accessing our archives.