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Private equity and hedge fund firms invested pension cash for retired Ohio teachers. Here's what happened.


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the State Teachers Retirement System
the Ohio Retired Teachers Association
Vanguard
Fidelity
Social Security
the National Association of State Retirement Administrators
Milliman Inc.
the California Public Employees' Retirement System
Apollo Global Management
the Carlyle Group
the Securities and Exchange Commission
the University of Oxford's
Saïd Business School
SEC
the Ohio Retirement Study Council
the Ohio House
Senate
Fichtenbaum
Wright State University
the NBC News Investigative Unit
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Dean Dennis
Patty
STRS
Nick Treneff
CalPERS
Ludovic Phalippou
Robin Rayfield
Edward Siedle
Rick Carfagna
invested."Gretchen Morgenson

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Cincinnati
Ohio
U.S.
Carlyle
Genoa Township
Dayton

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Positivity     33.00%   
   Negativity   67.00%
The New York Times
SOURCE: https://www.nbcnews.com/business/personal-finance/private-equity-hedge-fund-firms-invested-pension-cash-retired-ohio-n1269885
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Summary

Now, he says, he is concerned about the safety of the $88 billion fund after an analysis concluded that its overseers are overstating performance through a misleading benchmark and doling out undisclosed fees to Wall Street private equity and hedge fund firms.Some of the fees likely to have been paid to the financial firms would more than cover the cost-of-living increase that was eliminated, the report said.The analysis, commissioned by the Ohio Retired Teachers Association, an advocacy group, and released Monday, says the fund's holdings are opaque and carry high fees on actively managed portfolios — some estimated at 2 percent, far more than the low-cost market index funds that are run by companies like Vanguard and Fidelity, which millions of U.S. consumers use without a money manager's advice.A newly elected member of the pension plan's board said relying on active managers may have cost the fund $4.1 billion in the past decade.More than 500,000 beneficiaries rely on the STRS pension fund, 157,000 of them retirees. "Apollo's investors receive regular, detailed reporting of all fees, expenses and carried interest they pay in our funds," the official said.A Carlyle spokeswoman said, "For more than 30 years, Carlyle has delivered strong returns across asset classes and geographies, helping provide retirement security for public and corporate-sector employees including teachers, police officers and firefighters."Private equity firms buy companies, borrowing money to do so, and hope to sell them at a profit later. The report calls the practice "money for nothing."If the Ohio fund pays the committed capital fees, it said, halting them could generate $143 million every year, enough to pay the 2 percent cost-of-living increase the pension plan recently eliminated. Because the pension plan hasn't turned over its records, it is impossible to know whether such savings could be generated, the report said.Every 10 years, Ohio law requires the STRS fund to undergo performance audits conducted by the Ohio Retirement Study Council, a group appointed by leaders of the Ohio House and Senate and the governor.

As said here by Gretchen Morgenson