This joint AFT/Americans for Financial Reform Education Fund report challenges the narrative that private equity reliably delivers superior returns for public pensions, showing instead that declining profitability, opaque valuation practices, and complex fee structures erode the benefits. It also includes empirical case studies (e.g. a Florida pension example) illustrating how many systems might have fared better by limiting private equity exposure.

This report argues that when private equity firms adopt and follow labor and workforce standards, everyone benefits: private equity firms, portfolio companies, their workers, our pension funds and the broader economy. The ideal outcome is for every private equity firm to implement responsible workforce labor standards and principles. These labor principles include promoting unionization, negotiating union contracts, ensuring workplace safety, eliminating forced labor (including child labor) and maintaining neutrality when workers unionize.

As pension funds and institutional investors have increased investments in private equity, the latest report of the AFT and AFR evaluates the returns from these investments and examines the risks associated with private equity. Our report offers fiduciaries and policymakers a road map to increase the transparency of private equity practices and performance and mitigate the risks of these investments. 

This report focuses on how private equity–owned companies profit from the expansion of mass incarceration and how this poses regulatory, reputational, and financial risks to investors. It includes a “watch list” of firms and calls for fiduciaries to assess exposure to prison-related investments.

This special edition report outlines how investing in gun manufacturers can expose pension funds to litigation, regulatory, reputational, and financial risks. It encourages pension fiduciaries to evaluate whether exposure to firearm manufacturers aligns with their long-term risk mandates.

This report identifies hedge funds and public companies that profit from private prisons and immigrant detention, and presents the investment risks these exposures pose. It also provides a roadmap for trustees to examine and mitigate exposure to these controversial industries.

This report details how high fees charged by money managers erode net returns for public pension funds, putting state budgets and retirees at risk. It calls for greater transparency, fiduciary vigilance, and efforts at pension funds to reduce excessive fees.

This report analyzes the performance, cost, and risk profile of hedge fund investments held by public pension plans, showing that many funds underdeliver after fees. It warns that reliance on hedge funds as “alternative” strategies may not justify their cost and opacity for retirement investors.