> The irony is that PEs exist largely because of pension funds.
Do you have any evidence for this claim?
> Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent.
Again, please provide some sources for this claim. The S&P 500 index has returned about 15% on average over the past 10 years, and historically returned about 10% on average. [1]
> So if you wanna fix or ban PE, solve pensions.
This is a misinterpretation at best. Pensions do not make operational decisions at PE - PE management does.
This statement mistakes a funding source for the whole business model, which is problematic. Pensions supply capital, but PE’s behavior is from the general PE model: buy companies, use leverage, extract fees, seek exit in 5 to 10 years, and earn management fees plus carried interest. That structure exists whether the capital comes from pensions, sovereign wealth funds, insurers, endowments, family offices, or wealthy individuals. Public pensions are one major funding source, not the whole machine.
This statement also implies that PE is mainly a pension-funding response, which would be a falsehood. PE did not buy nursing homes or hospitals or vet clinics or prison telecoms or ambulance companies or dental chains or infrastructure-like services merely because pensions put in capital.
Do you have any evidence for this claim?
> Pensions fund a significant part of PE and they do so because they need around a 7% return in order to look solvent.
Again, please provide some sources for this claim. The S&P 500 index has returned about 15% on average over the past 10 years, and historically returned about 10% on average. [1]
> So if you wanna fix or ban PE, solve pensions.
This is a misinterpretation at best. Pensions do not make operational decisions at PE - PE management does.
This statement mistakes a funding source for the whole business model, which is problematic. Pensions supply capital, but PE’s behavior is from the general PE model: buy companies, use leverage, extract fees, seek exit in 5 to 10 years, and earn management fees plus carried interest. That structure exists whether the capital comes from pensions, sovereign wealth funds, insurers, endowments, family offices, or wealthy individuals. Public pensions are one major funding source, not the whole machine.
This statement also implies that PE is mainly a pension-funding response, which would be a falsehood. PE did not buy nursing homes or hospitals or vet clinics or prison telecoms or ambulance companies or dental chains or infrastructure-like services merely because pensions put in capital.
[1] https://dqydj.com/sp-500-return-calculator/