Kentucky Retirement Systems provided a Merry Christmas for Wall Street with another $10 million in fees. On top of the $50 million in fees KRS already gives Wall Street in no-bid contracts, that’s quite a boost.
Normally, a badly-funded plan (like KERS at 23% – the worst-funded state plan in the United States of America) would be buying more liquid traded stocks and bonds. To, you know, do things like make benefit payments. The KRS, however, is doing the exact opposite and buying the most illiquid alternative private equity, hedge funds and real estate investments available. Some believe that a lot of that may be a threat to Louisville for suggesting CERS leave the KRS – loading up on tough to sell investments, hindering a move.
The real driver, in our opinion, is that these plans that pay ten times the fees of normal stock and bond managers and are much more likely to donate when the party caucuses and Super PACs come begging.
Here’s some fun stuff:
- $120 million to Prologis Targeted US Logistics Fund
- $120 million Stockbridge Smart Markets Funds
- $30mm to DivcoWest Fund IV
- $70mm Levine Leichtman Capital Partners V
- $50mm to New Mountain Partners IV
Even more fun stuff:
- $73 million to Magnetar MTP Energy Fund
- $50 million to Red Kite Mine Finance Fund I
- €50 million ($65 million) to CVC Fund VI
- $40 million to Bay Hills Emerging Partners III
- $37 million to H/2 Core Real Estate Debt Fund
- $30 million to Rubenstein Properties Fund II
But how dare us discuss all of this while Damon and Greg are attempting to seal future deals for their personal benefit.