Earlier this week, The Oregonian/OregonLive published a story detailing the state’s distinctly aggressive investment strategy for its public pension fund, one that is now heavily skewed toward so-called alternative investments, and more specifically, private equity funds.
The opaque private partnerships now make up the largest slice of the pension fund’s portfolio. They lock up the pension system’s money for years at a time, making it more vulnerable to a financial downturn. They charge enormous fees. And flagging distributions from the funds in recent years have led to something of a cash crunch for the system, forcing it to sell investments to meet its annual benefit payments.
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