Size Matters
I learned something new today in an article on the Huffingtonpost.com, written by venture capitalist Eric Hippeau, that greatly disturbed me. Your pension fund may have bought the yacht, the “Maltese Falcon” pictured above, and owned by Tom Perkins – partner at the pre-eminent venture capital firm Kleiner Perkins.
How so? Apparently, a large part of the funding these venture capital firms receive come from pension funds – your retirement. “Pension funds and endowments are among the largest sources of new capital for VCs. Their portfolios of public stocks have declined so much that their usual allotment for venture funds is over the authorized levels.” Writes Eric Hippeau.
Is that really where your retirement savings belong? Shouldn’t your pension funds assets be invested more conservatively? Just asking, and so should you, ask your pension fund manager if they invest your pension money in venture capital firms? And then ask them to stop.
It is not that I am anti-venture capitalist, venture capitalists serve a very useful purpose as the Huffingtonpost.com article points out, in spurring innovation and growth in the economy. And I wish them the best of luck, but your retirement should not depend on the luck of some penis envying venture capitalist, who is sailing around the world in your yacht pretending to be Green.
Visit the Green Retirement Website, try our free retirement calculators, and learn how to retire early on your own yacht.
2 responses so far ↓
1 Bill // Jan 27, 2009 at 1:28 pm
I don’t like the idea of any ‘investment manager’ using his fund’s capital to purchase ego-driven toys. On the other hand, I doubt this yacht has lost 75% of its value in the last year like other ‘solid’ investments.
2 Add // Feb 25, 2009 at 6:21 am
Oh, come on! Perkins wasn’t spending his funds’ money on the boat. He was spending a portion of the huge amounts he legitimately earned over many years, co-running a firm he co-founded, which earned very impressive returns on funds invested by sophisticated managers of pension funds, university endowments and high net worth folks. Over the long run, despite early ’90′s bubble burst and more recent meltdown, investors in the preeminent VC funds have done very well. Should “your retirement savings” be invested in higher risk / higher potential reward opportunities? For most people the answer is some version of, “Yes, but only to a small degree.” A small exposure to private equity, in the long run, has proven to be a good complement to the more cautious alternatives, which should be more heavily weighted. Will that be true in the future? Who knows. The future looks pretty murky right now. If not VC then some other higher risk/reward component should certainly be considered for those whose retirement is not imminent . . . and that’s more of us than it was six months ago.
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