A candidate running to be New York state\u2019s chief money manager says he would pull the state\u2019s huge pension fund \u2014 the third largest in America \u2014 away from Wall Street firms.<\/p>\n
Drew Warshaw is running for New York state comptroller, a job most voters would struggle to define but one that includes oversight of the state\u2019s pension fund. If he unseats 18-year incumbent Thomas DiNapoli, Warshaw\u2019s plan is to move much of its nearly $300 billion of investments into ultra-cheap, passive index funds.<\/p>\n
The New York State and Local Retirement System has more than $90 billion invested in private equity, private credit, real estate, and other complex assets. All promise high returns \u2014 catnip for pension managers facing future payouts to retirees \u2014 but charge high fees, too.<\/p>\n
The question facing New York and hundreds of other state and local pension funds, charitable endowments, universities, and government funds around the world: Are these high-priced managers worth the fees they\u2019re charging?<\/p>\n
Historically, yes. Since the 1970s, these \u201calternative\u201d investments \u2014 so named because they aren\u2019t publicly traded stocks or bonds \u2014 have provided an edge. But that\u2019s been less true recently, as big tech stocks like Microsoft and Nvidia have soared. And now that alternative managers are chasing mom-and-pop investors<\/a>, there are real questions about whether they can keep beating the broader market.<\/p>\n