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.
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