Wall Street charges $2 billion in fees...pensioners make $40 million

[dstark]

Sounds fair…

http://mobile.nytimes.com/2015/04/09/nyregion/wall-street-fees-wipe-out-2-5-billion-in-new-york-city-pension-gains.html?referrer=&_r=1

[GMTplus7]

Same ol, same ol.
Heads they win. Tails you lose.

[ucbalumnus]

@New York Times

Over the last 10 years, the return on those “public asset classes” has surpassed expectations by more than $2 billion, according to the comptroller’s analysis. But nearly all of that extra gain — about 97 percent — has been eaten up by management fees, leaving just $40 million for the retirees, it found.

This makes it look like the managers beat the market indices by just slightly more than the amount of their fees. So the pension funds are still better off than if they just invested in market indices of the types of assets, but only slightly. Of course, it was a lot of income for the managers.

[dadx3]

That’s what I concluded, too, ucb. The article was written as if this were a big expose’ of malfeasance, but it seems the bottom line is that the pension funds earned for example 8.05% per year after fees when a portfolio of index funds with the same asset allocation would have earned 8.0%. So the pension funds received $40 million that they wouldn’t have if they just invested in index funds. Beating the market is hard, and beating the market over a 10 year period is even harder. Where is the fire?

[Iglooo]

Ironically, Wall Street is being communists;Labor makes more money than the capital.

[bluebayou]

New York City’s pension funds…

I’d raise the issue in a different way: why are the City leaders approving those contracts in the first place???

(Not Wall Street’s fault if government leaders want to ‘over-pay’ them.)