Bloomberg reports this bit of eye-catching news: Three of the biggest investors--state pensions in California, Oregon and Washington--have invested $54 billion in private equity funds. But they have not realized even a paper gain in the last seven years. The issue is what kind of response this will prompt.

On the one hand, things are looking up. Some PE firms seemed to have stemmed the carnage. A lot of exit IPOs are on the drawing boards, assuming the markets hold up.

But Bloomberg also reports that these poor returns are not going over so well in some quarters. "At the end of the day, I care about how much do I give you, and how much money do I get back," one pension chief told the service. Some are openly skeptical of internal rates of return. Pensions are in a tough spot. Many of them face the need to hike returns to meet future liabilities. So you need alternative investments. The risks of course are greater. Right now, more may start to feel like they've made losing bets. 

For more:
- here's the article

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