Unions and University Endowments Have Invested Billions With Bain Capital; Press Virtually Ignores
In his weekend syndicated column, Deroy Murdock unearthed and relayed information the establishment press hasn't told the nation about how certain public-sector pension funds and university endowments have chosen to invest money entrusted to them in Bain Capital. Yes, Bain Capital.
Until three weeks ago, it would have been somewhat understandable if the business press didn't expect to find a story here. After all, who would expect that the organizations complaining the loudest and longest about the conduct of Bain, the private-equity firm GOP presidential candidate Mitt Romney left over a decade ago, would actually have significant funds invested there? These people couldn't possibly be that hypocritical, could they? Oh yes they could.
On August 12, the Boston Globe's Scott Helman generated a ten web-page tome on Bain and private equity. Included therein was this gem of a quote, which one would think might have raised "uh-oh" alarms among many of Bain's fiercest critics on the left (at Page 8 of 10; bolds are mine throughout this post):
Take the California State Teachers’ Retirement System, which has some $1.25 billion invested with Bain. A spokesman for the system, Ricardo Duran, says in an e-mail that its fiduciary duty to 856,000 members and their families is paramount. “With that as a backdrop,” he says, “the scrutiny generated by a heated election year matters less than the performance the portfolio generates to the fund.” And private equity, Duran says, has been the best-performing asset class in the system’s portfolio over the past 24 years.
W-w-w-wait a minute.
You're telling me that "CalSTRS," which invests the retirement assets of the state's teachers and public school unions, has over a billion dollars invested in Bain -- right now -- and that no one else in the press as far as I can tell has jumped on the obvious hypocrisy of the unions going after Bain and the essence of Romney's business career?
CalSTRS, which says on its home page that it "is committed to sustainability and requires the companies with which we invest to be environmentally, socially and economically responsible," apparently has no problem with placing such a huge sum in Bain's hands. In fact, by saying that placing money with Bain is consistent with its "fiduciary duty" to maximize its returns, Mr. Duran comes with an inch or two of saying that crossing Bain off of its list of potential investment firms would be an actionable breach of that duty.
Helman noted that public-sector placements with Bain go well beyond CalSTRS, as for quite some time, "public pension funds — charged with securing the retirements of teachers, firefighters, and cops around the country — were boosting their private equity investments, attracted by better rates of return than they could find elsewhere."
Given this investment posture, one might think that the unions involved might have a problem engaging in heavy-duty Bain bashing. Nope. The AFL-CIO is currently plugging a web site run by a far-left advocacy group which is dedicated to doing just that:
At BainOfOurExistence.com, the Center for American Progress describes what the Bain debate is all about and details how Romney laid off workers, outsourced jobs and much more while at Bain.
Bottom line: the issue of greed vs. fairness is more than a debate about Romney’s role at Bain. It’s about fundamental American values we all hold—and how Romney’s actions, while running a major corporation, show he does not share our values.
... Bain’s private-equity executives have enriched dozens of organizations and millions of individuals in the Democratic base — including some who scream most loudly for President Obama’s re-election.
Government-worker pension funds are the chief beneficiaries of Bain’s economic stewardship. New York-based Preqin uses public documents, news accounts and Freedom of Information requests to track private-equity holdings. Since 2000, Preqin reports, the following funds have entrusted some $1.56 billion to Bain:
* Illinois Municipal Retirement Fund ($2.2 million)
* Indiana Public Retirement System ($39.3 million)
* Iowa Public Employees’ Retirement System ($177.1 million)
* The Los Angeles Fire and Police Pension System ($19.5 million)
* Maryland State Retirement and Pension System ($117.5 million)
* Public Employees’ Retirement System of Nevada ($20.3 million)
* State Teachers Retirement System of Ohio ($767.3 million)
* Pennsylvania State Employees’ Retirement System ($231.5 million)
* Employees’ Retirement System of Rhode Island ($25 million)
* San Diego County Employees Retirement Association ($23.5 million)
* Teacher Retirement System of Texas ($122.5 million)
* Tennessee Consolidated Retirement System ($15 million)
(Note: Prequin is calls itself "The alternative assets industry's leading source of data and intelligence" and "provides data and information on the private equity, real estate, hedge funds and infrastructure asset classes.")
And there's more. Murdock notes that the endowment funds of major universities, including several in the leftist fever swamp known as the Ivy League, have also placed huge sums of money with Bain:
... Leading universities have also profited from Bain’s expertise. According to Infrastructure Investor, Bain Capital Ventures Fund I (launched in 2001) managed wealth for “endowments and foundations such as Columbia, Princeton and Yale universities.”
According to BuyOuts magazine and S&P Capital IQ, Bain’s other college clients have included Cornell, Emory, the Massachusetts Institute of Technology, Notre Dame and the University of Pittsburgh. Preqin reports that the following schools have placed at least $424.6 million with Bain Capital between 1998 and 2008:
* Purdue University ($15.9 million)
* University of California ($225.7 million)
* University of Michigan ($130 million)
* University of Virginia ($20 million)
* University of Washington ($33 million)
Murdock sums up the situation nicely:
Is Bain really a gang of corporate buccaneers who plunder their ill-gotten gains by outsourcing, euthanizing feeble portfolio companies and giving cancer to the spouses of those whom they fired? If so, union bosses, government retirees, liberal foundations and elite universities thrive on the wages of Bain’s economic Darwinism.
If, however, these institutions relish the yields that Bain Capital generates by supporting start-ups and rescuing distressed companies, 80 percent of which have prospered, then this money is honest — and Team Obama isn’t.
It should be incumbent on unions and universities which are joining themselves at the hip with President Obama and his Bain-hostile reelection campaign to do what Glenn Reynolds at Instapundit called for today: "Divest (from Bain), or shut up."
If they won't, a responsible establishment press should call them out for their hypocrisy until they do.
Since that isn't going to happen -- they've already had three weeks since Helman's writeup and haven't done anything with it -- Republicans and conservatives need to do it.
Exit questions: Which unions and/or university endowments invested in the Bain partnership or other entity which was involved with GST Steel? Following the illogic of the Obama campaign and its Super-PACs, aren't these entities accomplices in the cancer death of Joe Soptic's wife?
Cross-posted at BizzyBlog.com.