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CalPERS fee disclosure raises question of whether private equity returns are worth it


LOS ANGELES — Questions of risk and expense have been raised after the California Public Employees' Retirement System revealed it has paid private equity managers $3.4 billion in bonuses since 1990.

CalPERS, the nation's largest public pension fund, also said Tuesday that it had shelled out some $700 million in performance fees for the last fiscal year.

The Los Angeles Times says (http://lat.ms/1Tf3vNm ) the disclosure comes as critics increasingly question the wisdom of pension funds investing in such complicated corporate deals as start-ups and leveraged buyouts.

CalPERS officials emphasized that private equity generated $24.2 billion in net profit for the state's retirees over the 25-year period — a strong performance that they said more than makes up for the sector's added risk, complexity and cost.

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