Monday, June 22, 2009

Calpers to Double Down on PEU's

The California public pension fund plans to increase investments in private equity underwriters (PEU's). The pension is currently underfunded. Rather than ask for greater contributions, it plans to invest its way out of the shortfall. LA Times reported:

Private equity deals generated an average annual return of 8.8% over the last decade, compared with an average annual loss of 0.9% for publicly traded stocks.
PEU returns have outpaced other investment vehicles after a recession. That is if the recession is truly over.

Calpers will roll the dice, throwing cash at the usual suspects.