Here’s what U.S. state and city pension funds are getting this year for the hundreds of millions of dollars in fees they’re forking over to hedge funds: almost nothing.
Private equity and hedge funds have earned lots of money capitalizing on the panic of underfunded public pensions seeking higher returns to deal with chronic under-funding.
There have been no higher returns, but Wall Street has gotten its vig, some of which, of course, gets recycled back to the campaign funds of politicians who might otherwise provide oversight of the pension funds.
As Yves Smith is wont to say, It’s a, “Self licking ice cream cone.”