From James McNair at WFPL News:
Drew Curtis, the independent candidate for governor, said Wednesday that the state public pension system’s taste for high-fee alternative investments through secret contracts “looks bad” and should be scrapped in favor of conventional, less-expensive approaches.
Curtis took aim at Kentucky Retirement Systems, the $16 billion pension fund for state, city and county employees and retirees, after learning that KRS pays 75 percent more in annual money-management fees than previously disclosed. Most of the $46 million in newly disclosed fees go to private equity firms. The new annual total is $108.3 million.
In an interview with the Kentucky Center for Investigative Reporting, Curtis said he would dump “high-fee, high-risk” private equity and hedge fund managers, whose fee structures and investment holdings are concealed from public view with KRS’ consent. For example, KRS’ “funds of funds” accounts are not broken out into holdings. Curtis said he has a “huge problem” with such secrecy.
“At best, it only looks like corruption, and that’s a really bad starting point for the outcome range we’re looking at here, because the problem is whenever things are put in opaque boxes, that’s where bad stuff happens,” Curtis said.