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Pensions’ Cash Crunch Poses Challenge for Private Equity

The pension cash crisis has snowballed to the biggest deficit in at least 15 years, forcing some to cut back on illiquid assets

The California Public Employees' Retirement System (Calpers) in Sacramento, California, U.S., plans to reduce the number of external money managers it deals with.

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By
Jessica Davies

U.S. pension funds have a cashflow problem: the gap between their income and obligations is the widest it’s been in at least 15 years, prompting some to rethink their approach to illiquid investments such as private equity.

Private equity’s coffers have been overflowing in recent years, in part thanks to pension funds’ appetite for higher-yielding alternative assets. Buyout firms amassed a record $324 billion to invest globally in the first half of 2017, according to Dow Jones & Co.’s research database LP Source.

But...

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