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You’re right. As jascode suggests I think you took a stricter definition of “required” than I intended. We have pension plans buying private equity which should
by erentz 6y ago
You’re right. As jascode suggests I think you took a stricter definition of “required” than I intended. We have pension plans buying private equity which should never happen. We have had them selling volatility because they’re desperate to find yield, which should never happen. Etc. When I say required I mean that for whatever management reasons they decide they must continue to target the same returns, and due to the artificially low interest rates they’ve been required to go into riskier assets to find them.
- cool_dude85 6y agoPension managers, and probably all fund managers, make stupid decisions all the time. I suspect especially so in cases where they have to be seen to be actively managing things to justify their salaries. I don't think it has anything to do with the fact that there's an assumed long-term 8% return. Fund managers in situations where no such assumed returns exist make the same bad decisions all the time too.