Saturday, April 3, 2010
I have written a number of posts recently about how pension and endowments funds have been abandoning the stock market in favor alternative investments, including private equity.
However, as this article from today's New York Times discusses, the monetary rewards for most private equity investors has been fabulous - for the managers. Unfortunately, the actual investors in these funds have had disappointing returns, to say the least.
In my opinion, lots of investors are seduced by the idea that there is someone, somewhere, who has the "magic keys" to investment success, and will bet heavily on funds whose returns may not be realized for years, if at all.
Pension Funds Fail to Reap Rewards in Private Equity - NYTimes.com