A Tale of Two New York Pension Funds?

Leo Kolivakis's picture

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ThirdCoastSurfer's picture

Look at the results! From $156b in 2007 down to $111b and now back to $146b, so in 4 years the net result is down 6% but look how they all cheer! 

Instead of cautiously investing to maintain and build America's infrastructure they gamble and distort.  These pension funds should be required to invest in the muni bonds and they should be baned from any equity investment. While Goldilocks is out to ruin the world, I sure hope that the little boy that cried wolf is able to maintain confidence and that the other little boy can keep his finger in the dike a lot longer because I sure don't want those who depend on these pensions to ever have to feel the effects of the other side of the trade. 

 

centerline's picture

Too bad the money is already toast.  Good management will keep a few people getting checks for a little longer.  That's about it.  Fun times coming soon.

ebworthen's picture

 

Cities and States create underfunded pensions then make promises that they cannot possibly keep.

When their schemes fail, they pull the rug out from under their citizens and cut the pensions, gut them, and raise the corpse of patriotism dressed in "austerity" garb and animate the mouth to speak of "responsibility".

Our problem is not one of management but of morality and a lack of gallows for the malfeasant.

These pensions don't need managers any more than a dog needs fleas.

Canadian fleas won't help the underfed abused dog anymore than Amerikan ones.

 

centerline's picture

The pension funds were gambled into oblivion.  Not directly per se - but simply because they are party to a system founded on unsustainable math and leveraged into the statosphere.  Either way, the wealth will be vaporized - either by inflation, or by deflation - likely both (just depends on the timing and perspective).  It is already "dead money walking" as a result.

akak's picture

Zzzzzzzzzzzzz .................

ZackAttack's picture

I don't believe it's possible to manage $100+ billion to outperform the general market in any sort of consistent fashion.

Leo Kolivakis's picture

Really? Tell that to Bridgewater, PIMCO, Barclays Global, and a few others...

akak's picture

"... Tell that to Bridgewater ... BRAWWWK! .... tell that to Bridgewater .... BRAWWWWK! .... tell that to Bridgewater ....... BRAWWWWK! ........"

 

leo want a cracker?

Leo Kolivakis's picture

Really? Tell that to Bridgewater, PIMCO, Barclays Global, and a few others...

Leo Kolivakis's picture

Really? Tell that to Bridgewater, PIMCO, Barclays Global, and a few others...

PsefTikos's picture

My aplogies, my page crashed, I refreshed and it posted multiple times.

PsefTikos's picture

....actually 150K is a good investment - very good ROI.  You spend 150K and save a life (or lives).  How much is a life worth? Let me commodify a life at a couple of million/billion each (what do you think your life is worth?)  The ROI is spectacular...

PsefTikos's picture

....actually 150K is a good investment - very good ROI.  You spend 150K and save a life (or lives).  How much is a life worth? Let me commodify a life at a couple of million/billion each (what do you think your life is worth?)  The ROI is spectacular...

PsefTikos's picture

....actually 150K is a good investment - very good ROI.  You spend 150K and save a life (or lives).  How much is a life worth? Let me commodify a life at a couple of million/billion each (what do you think your life is worth?)  The ROI is spectacular...

onlooker's picture

14.6% sounds pretty good to me. What was the average over the last 3 years-- anyone know?

PsefTikos's picture

I want my lifeguard making 150K...they are expected to fight sharks hand-to-fin in order to save my life!

mt paul's picture

raise the debt ceiling... 

my federal pension needs

a 6 % COLA increase...

pay more taxes peasants...

Bruce Krasting's picture

You make it sound like there is deep thinking going on here. Not the case. The portfolios are on auto pilot. 70/30 equity debt. On the equity side it is Russel 2000 with a bias towards S&P 100. The only question left is the international side. There it is major market/large caps. 5/10/15% international is the only variable. (AKA: Narrow and Deep)

These policies have been in place for years. Once set, they establish (by computer) what stocks to buy.

Oh, by the way, who set up this way of portfolio management for the City? Who executes the algo execution orders? Goldie, of course.

nmewn's picture

Bruce!...you found my missing knife! ;-)

Dirtt's picture

Goldie, of course.

Krasting:  Beacon of light.  Few and far in between.

mt paul's picture

gold is not money

to the man

who has none...

Seasmoke's picture

all Pensions everywhere are a Ponzi ......and all ponzis eventually collapse

PulauHantu29's picture

Why doesn't everyone work a few extra hours a week to help Bail out all the States that have a deficit in funding their own public pension fund since the people in those same States down want to work harder....pay more taxes...and fund their own retirement?

Don't you get a warm and fuzzy feeling knowing that you can work harder to help a lifeguard or some other worthy public employee in California?

Fun Fact of the Day: California Edition
Here is a small clue that might help explain California's fiscal problems:

"According to a [Newport Beach] city report on lifeguard pay for the calendar year 2010, of the 14 full-time lifeguards, 13 collected more than $120,000 in total compensation; one lifeguard collected $98,160.65.

More than half the lifeguards collected more than $150,000 for 2010 with the two highest-paid collecting $211,451 and $203,481 in total compensation respectively....Lifeguards are able to retire with 90 percent of their salary, after only 30 years of work at as early as the age of 50."

http://orangepunch.ocregister.com/2011/0...

all_in_now's picture

Leo, when you plan to get tired of kissing up the ugly assess of these bastards?

Leo Kolivakis's picture

Hmm, case you haven't been reading me, I'm not exactly the world's greatest ass kisser. If I were, I'd still be working at a large Canadian pension fund, probably making a lot of money but miserable as hell.-:)

akak's picture

Hmm, case you haven't been reading me, I'm not exactly the world's greatest ass kisser.

Funny you dare make such a claim while having your brown nose permanently affixed to Bernanke's anus, and simultaneously NEVER being able to muster even a whimper of outrage at the massively corrupt, unsustainable and immoral financial and monetary status-quo, inevitably rising to its defense whenever challenged or condemned here instead.

Gene Parmesan's picture

The tyranny of pension consultants is a major governance flaw of US pension funds, all about cover-your-ass politics, and it is killing pension funds around the country. This is a major scandal that no reporter has covered adequately.

 

You're out of your mind. We're in the midst of some of the most under-reported, damaging and overt financial scandals of all time playing out their last acts and you're apparently calling for the media to run with an investigation of pension consultants? Wow.

Thisson's picture

Leo, you're seriously deluded to think that Pension funds should be even more reliant on treasuries and equities.  How about advocating a 10% holding of PHYSICAL gold?

Leo Kolivakis's picture

I am advocating a more intelligent approach, including in-house maangement of equities, enhanced indexing, and liquid absolute return strategies using a managed account platform.

ZackAttack's picture

Points to the scoreboard... Asset class of the decade, and they all completely missed it.

Financial Newbie's picture

"I am advocating a more intelligent approach..."

 

Careful.

I'm sure there's a lot of intelligent/experienced individuals who have physical gold in their portfolio.  Sometimes return OF capital is more important than return ON capital.

 

So you might be better of to say "different" as opposed to "intelligent" approach, unless you're actively seeking to rile up the ZH'ers, Leo...

 

Cheers,

-FN