5 things to know about Oregon PERS’ big bets on private equity, other ‘alternative’ investments

Earlier this week, The Oregonian/OregonLive published a story detailing

the state’s distinctly aggressive investment strategy for its public pension fund

, one that is now heavily skewed toward so-called alternative investments, and more specifically, private equity funds.

The opaque private partnerships now make up the largest slice of the pension fund’s portfolio. They lock up the pension system’s money for years at a time, making it more vulnerable to a financial downturn. They charge enormous fees.


And flagging distributions from the funds in recent years have led to something of a cash crunch for the system, forcing it to sell investments to meet its annual benefit payments.

Treasury officials remain bullish, saying markets are cyclical and they expect the complex bets they’ve made to pay off and deliver much higher returns than they’d get from a vanilla portfolio of publicly traded stocks and bonds. But other aren’t so sanguine and believe the market has changed in ways that will limit those returns.

Here are five things to know about that strategy, and what it means for taxpayers:

To learn more about Oregon’s investment strategy, and the risks some say it presents,

read the full article at OregonLive.com

.

Generative AI was used to help summarize reporting from our

Monday story

. These takeaways were reviewed and edited by The Oregonian/OregonLive.

—

Ted Sickinger

is a reporter on the investigations team. Reach him at 503-221-8505,

tsickinger@oregonian.com

or

@tedsickinger

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