reply to post by wwiilliiaamm
Public employee pension funds are among the largest clients of the investment management industry. Who do you think runs their money? The people
who run their money are the same people they demonize on a daily basis.
SEIU, every state's teacher's unions, Teamsters, AFLCIO all use external investment managers.
The largest public employee union in the country, CALPERS payed $1.115BN last year alone in external fees to over 100 of the largest and most niche
investment managers in the world, some of that money run in the US, some run overseas. Of the costs to run the fund, external fees made up 90% of
the fund's costs
Oh, the vulture capital firms - those destroyers of the economy, the ones that have destroyed the economy and hurt the middle class? Public funds
are not only heavily invested in private equity, but also hedge funds, derivatives and every other form of alternative investments
"Large public pension plans are pouring more money into private-equity funds, deepening ties between government workers and an industry currently
under the harsh glare of U.S. presidential politics.
Big public-employee pensions had about $220 billion invested in private equity in September, or 11% of their assets, according to Wilshire Trust
Universe Comparison Service, which tracks the holdings of pensions, foundations and endowments.
That is up about $50 billion from a year earlier, when such investments accounted for 8.6% of large pension funds' assets. A decade ago, pensions
with at least $1 billion under management had just 3% of their money .."
How's that for hyprocracy? If investment management gents are getting paid too much, then, were the unions honest and had integrity, they would
fire them and run the fund themselves. Further, if they were being paid fees they deemed too large, they are violating their fiduciary obligation to
Who do you think runs these funds, some government employees? Get real. The people who run these funds are the gents in the Ferrari's, with their
house in the Hamptons, the other in Aspen - the very people the union bosses rail against.
Every one of these pension boards have rank and file union representation on them - not just executives. Why do they hire these outside firms?
Because they are better at delivering returns, thats why.
How about having the unions put their money literally where their mouths are and fire these Wall Street firrms, bring the money in-house and run it
themselves. The reasons they won't do that is 1 - because they can't and 2 -because their rank and file would sue them, not being willing to
accept a 2-3% maximum return they would receive from running it in-house.
Who can the Calpers rank and file thank when they have a comfortable retirement? The gents with the Ferraris, homes in Aspen and the Hamptons who
are making several $M/year, thats who.
BTW, that champion of the working man, Richard Trumka, head of the AFL-CIO who rails against income inequality makes @$300K/year - 8 times the income
of the average worker he represents:
"As President of the union, Trumka makes over eight times as much as the average American worker.
According to the Center for Union Facts, Trumka brought home a gross salary of $264,827 in 2010, plus another $18,513 in additional compensation, to
represent his union. The union leader has earned well over $200,000 every year since he was promoted to Secretary Treasurer in 2003.
In 2011, Trumka earned $293,750.
According to the recent email from Trumka’s desk, the average American worker makes about $34,000 a year."
Get real about unions and by the way, the fact that the Trumpka quote is from a conservative site, his pay is, by law listed on the AFL-CIO annual
financial statement and is by law public information