The Oregon Investment Council’s plodding, business-as-usual approach to the four-year meltdown of the Oregon Public Employees Retirement Fund, combined with practically no acknowledgement of it, not only does little to expedite getting things back on track, but also sows doubt that this council is up to the job.

It does not take much financial expertise to see that advisors and staff made some big mistakes in 2020 and 2021 by failing to rebalance the portfolio to reduce its over-allocation to private equity. This failure perfectly positioned the portfolio for trouble when interest rates spiked. Private equity distributions froze up, creating a cash crunch and forcing large draw-downs of its public equity holdings just as the bull market was getting started. And that’s about where things stand today, with managers still waiting for private equity to stop damaging this portfolio.

We could take a little more sympathy for investment managers if we could point to other institutions that suffered the same fate. But we can’t. The Oregon Public Retirement Fund was an outlier in its large private equity allocation, and now it is an outlier in the sub-par performance caused by that allocation.

With the council stuck in this wait and see strategy, there is likely more pain ahead for this portfolio and for the struggling pension system that it supports. But that shouldn’t stop the council from making plans for the day when private equity starts once again making significant distributions. I hope these plans include a big reduction in private equity’s allocation to get it more in line with peers. Ongoing media reports don’t paint a pretty picture of the future of private equity. The council should pay attention, move on from the private equity era, and stop treating its public equity portfolio as the ugly stepsister.

And from a public relations standpoint, it would be helpful if the council acknowledged that it not only understands the causes and severity of this meltdown but also intends to act with a sense of urgency to get performance back up to where it is a positive for the PERS system, rather than one more problem it must face.