The firestorm among U.K. pension funds is a wake-up call for their peers across the Atlantic. The end of an era of cheap money is exposing an industry that’s chronically underfunded and overexposed to market turbulence.
Imagine a meeting of executives of a typical public pension fund following last quarter’s rout.
Chief investment officer: 2022 has been brutal. Sixty percent of our fund is invested in equities, they’re down 25%. Another 20% is in bonds, which are down 15%. Twenty percent is in alternatives. Commodities and hedge fund strategies have done well overall, but real estate and private equity are down. Overall, we’ve lost 15% of our asset value.