Public employees have public money in their pension funds to save for retirement. Those pension funds invest that public money in private equity firms. Those private equity firms then refuse to say how much they're charging, and why. Hmmm.

Now that big public pension funds are finally beginning to reject the ultra-high fees, opaque strategies, and questionable value of hedge funds, attention has turned to their investments in private equity funds—which also have ultra-high fees and different opaque strategies. Leaving aside the question of whether or not billions of dollars in public money should even be plowed into these expensive "exotic" investments in the first place, I think that most reasonable people can agree that an opulent private equity firm should not be able to take the retirement money of public employees and then not reveal what it's doing with it.

And yet! From the Wall Street Journal today comes an examination of how some of the world's leading private equity firms are trying to strongarm public retirement funds into breaking public records laws. That seems... not in the public spirit.

KKR & Co. warned Iowa's public pension fund against complying with a public-records request for information about fees it paid the buyout firm, saying that doing so risked it being barred from future private-equity investments.

In an Oct. 28 letter to the Iowa Public Employees' Retirement System, KKR General Counsel David Sorkin said the data was confidential and exempt from disclosure under Iowa's open-records law. Releasing it could cause "competitive harm" to KKR, the letter said, and could prompt private-equity fund managers to bar entree to future deals and "jeopardize [the pension fund's] access to attractive investment opportunities."

Yes: here we have an investment firm more or less ordering a public pension fund to ignore public records law with the threat that they might not be allowed to give more public money to this private investment firm in the future. And what is the big secret that cannot be revealed? Fees! I wonder just who might be damaged by the public knowing the fees that their own pension firms are paying on their own pensions? Hint: not the public!

Gretchen Morgenson published a deep exploration of this very same issue in the New York Times a couple of weeks ago, if you have a large appetite for outrage.

I would suggest that middle class public employees instruct their pension funds to instruct these private equity firms to take their extremely high fees that they are unwilling to publicly reveal and go fucking fuck themselves.

[Pic via]