Risk and return arise together. This article focuses on the high fees charged by equity funds and the risks they take. What I don’t see are actual month to month or year to year returns (net of fees) vs. the S&P500. With that data one could see clearly whether or not private equity has outperformed net of fees. If not, CalPERS would be better off with a 0.05% fee index fund from Vanguard rather than the 2 and 12% of private equity.
For example, the S&P 500 was up +32.15% in 2013 and +13.48% in 2014. What were CalPERS’ private equity returns in those (and all) years net of fees?
When will that data be available?
Who will sign off on the audit of that data? 🙂