Another KRS Mess The Mainstreamers Ignore

Why on earth does Kentucky Retirement Systems continue buying Private Equity?

It makes little sense for a plan that’s just 27% funded – and needs liquid assets – to buy the most illiquid investments. KRS does so every couple months, it seems. Most recently on February 21 and prior to that, December 7.

Here’s this:

Kentucky Retirement Systems commits $121 million to 2 private equity funds

Kentucky Retirement Systems committed €50 million ($66 million) to Triton Fund IV, a northern European middle-market buyout fund managed by Triton Advisers, and up to $55 million to H.I.G. Capital Partners V, a buyout fund.

Some things:

  • Private Equity has the highest fees. That makes it easier to provide kickbacks.
  • Private Equity is tough to break up and sell. Which means KRS could be buying Private Equity with reckless abandon in an attempt to make it more difficult for CERS to pull out of the system.

It’s a fun culture of cover-up and corruption. Especially when funding is related to investment scandals.