With a week before the Labor Day holiday, dealmaking grinds to a halt leading reporters who cover the beat to either go on vacation or rehash old stories. In the case of the private equity reporters at the Financial Times, they chose to dig deep into the past and revisit the gloom and doom prognostications about public pension funds and their relationship with buyout firms. The story is almost as old as the asset class, but the FT initially portrays the problem as something uniquely new. However, the reporters fall on their faces when they dive into the history of PE firms and pension funds. Evidently, the story claims the first time a public pension fund got involved with a PE firm was in the early 1980s, when Oregon invested $176 million in a Kohlberg Kravis & Roberts fund. The story then explains that Oregon's success led other public pension funds to enter the asset class throughout the rest of the 1980s. The story about Oregon along with the added details that most large public pensions actively invested in PE funds by the 1990s contradicts the assertion that the problem is new. A quick search of The Deal's archive turns up plenty of stories about the subject. At any rate, despite the story's misleading Chicken Little lead, it offers an interesting 20-year history of public pension fund involvement in the world of private equity. —Matthew Wurtzel
See story from The Financial Times
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