Opting for risky and secretive private equity investments cost Florida Pension fund an estimated $1 billion on six deals 

Pension managers have put $18.7 billion in risky and secretive deals, ramping up with $2 billion in past year ahead of pension reform

Florida’s pension fund managers make no secret of the fact that the pension fund has been investing in high-risk private equity deals for more than two decades.

But what has been under cover and kept from public view by government pension managers at the State Board of Administration are the back-up details that are needed to see how poorly some of these deals have performed for taxpayers – and the public employees relying on the traditional pension plan for their retirement.

Public records obtained by this reporter show that on just six closed-out private equity partnership deals, Florida pension managers earned $351 million in profits.

But if Florida pension managers had invested that money up front in a stock market index fund, taxpayers would have made $1.38 billion over the same time periods.

In essence, these risky bets on private deals cost taxpayers an estimated $1 billion.

Click Buy it Now to Access this In-Depth Story: 2,900 words. Includes charts of these six closed out private equity deals compared to the Russell 3000 stock market performance index. Firms are: Corporate Partners, Liberty Partners, TSG Capital, Ripplewood Partners and Thomas H. Lee Partners.

First published April 2, 2013

About Gina Edwards: Gina Edwards is a national award-winning investigative reporter who specializes in public corruption, securities fraud and corporate crime. During her career, Edwards has uncovered fraud involving hundreds of millions of dollars related to securities fraud, pump-and-dump market manipulation, mortgage fraud, real estate land trust fraud, insurance fraud, hedge funds, mortgage backed securities and Ponzi schemes.

In 2009 while working as a private investigator, Edwards helped develop securities fraud evidence on behalf of investors that eventually became part of key Securities and Exchange Commission charges involving Charles Schwab's $1.3 billion bond mutual fund that resulted in a $119 million fine and restitution order for investors.

As a reporter, Edwards is recognized for her dogged use of public records and for securing and analyzing large-scale data sets to tease out investigative findings that would be impossible to uncover by hand. At the Naples Daily News, Edwards analyzed more than 100,000 real estate sales transactions and warned about the effects of real estate flipping on soaring home costs in an investigation that pre-dated the housing market crash. Another of her investigations at the Naples Daily News exposed weak efforts to enforce Florida’s ethics laws spanning 20 years.  A four-year public corruption investigation by Edwards at the Naples Daily News ultimately led to the appointment of a special prosecutor and the arrests of 10 local elected officials, including three county commissioners and the county manager, and developers on influence peddling charges.

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