In my previous post, I explained why investments in private equity firms that buy and manage companies with the intent of changing them so they can be sold for a profit are especially risky. Those risks are ultimately being borne by a large segment of the population because public pension management institutions that hold the pension funds of public schoolteachers and other state workers are often large investors in private equity.

Yet, as I also pointed out, those high risks might be justified if the returns from investments in private equity were especially large. But are they? READ MORE