We've suggested before that when private equity and hedge fund returns really tank, the little guy will be hit--via pensions who take losses. We've also said that the hit will be light if pensions do a good job diversifying their assets. So what do we make of the recent trend toward pensions investing directly in deals as part of consortiums? Well, the returns could be strong. The Blackstone Group aims to raise more than $1 billion to invest directly in the $17.6 billion Freescale Semiconductor deal, and that could yield higher returns than if pensions were to invest indirectly. But this trend is putting many pensions in unfamiliar territory. It requires a new kind of expertise and new risks. So it may be something that ought to be publicly commented upon and approved. This is yet another example of the fact that pensions are under pressure to generate returns to handle all those retiring boomers.

For more on this:
- Here's a New York Times article
- Pensions stream into hedge funds. Article