Efforts to increase the share of private equity investment in retirement funds are misguided and dangerous.
The UK has landed on private equity as its answer to lackluster economic growth and inadequate retirement savings. Perhaps taking a page from the US, where retirement funds have long made significant equity investments, the UK is hoping that adding lots of private equity to its pension pots will drive higher returns and superior growth outcomes.
It’s a terrible idea. It shows that financial regulators, government officials and those in the financial industry lobbying for these changes have lost sight of what retirement investing is supposed to be. Rumblings of opening US pensions to more private equity investing have thankfully been shelved for the time being.
Continue reading the entire piece here at Bloomberg Opinion (paywall)
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
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