Aaron Brown, Columnist

Pension Funds Are Hooked on Private Equity, No Matter the Risks

Underfunded plans have little alternative but to allocate to an investment with a history of beating public equities.

July 31, 2024 at 9:00 AM UTC

Aaron Brown is a former head of financial market research at AQR Capital Management. He is also an active crypto investor, and has venture capital investments and advisory ties with crypto firms. He is the author of the soon-to-be-released "Wrong Number."

The pension conundrum.
Photographer: David Paul Morris/Bloomberg

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Private equity has been in the news frequently in the last few weeks, and not in a good way.

The Teachers Retirement System of Texas this month announced plans to reduce its PE allocation by $9.7 billion, while the American Federation of Teachers issued a report that said labor practices at PE-owned firms endanger the portfolios backing pension benefits.