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Private Equity Managers Are ‘Running a Grift,’ Pennsylvania Treasury Says

State Treasurer Joe Torsella has “enormous concerns about private equity,” a spokesman said.

Pennsylvania’s Treasury department took a jab at private equity over the weekend.

The office, which oversees investments for more than $100 billion in public funds including two large pensions, used its recently created Twitter account to suggest people are just catching on to swindling in the buyout industry.  

The viewpoint emerged in reference to a clip of actor Jeff Goldblum playfully responding to a Variety interviewer’s question about a possible divorce between Spider-Man and Walt Disney Co.’s Marvel Cinematic Universe. “No! This is the first I’ve heard of it,” Goldblum had quipped in animated shock. “I’m crestfallen.”

“Me pretending to hear news for the first time that people have been gossiping about for days,” Athletic NBA staff writer Zach Harper tweeted August 24 in response to the video clip of the Pennsylvania-born actor.

“Me, when I hear Pennsylvanians finally talking about how private equity managers are mostly running a grift,” the state’s Treasury office responded in a tweet the next day.   

While the tweet was written by a member of the communications staff, it was informed by the views of Pennsylvania Treasurer Joe Torsella, a spokesman for the office said in a phone interview Monday. “He has enormous concerns about private equity,” the spokesman said.

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Torsella, who was sworn into office in January 2017, is the custodian of the state’s public funds. He also serves on the boards of its pension funds, the spokesman said.

The state’s largest pension, the Pennsylvania Public School Employees’ Retirement System, managed $57.2 billion of assets at the end of March, according to a report posted on its website. Private equity represented 14.6 percent, or about $8.2 billion of its portfolio, the report shows.

Similarly, the Pennsylvania State Employees’ Retirement System had 14.5 percent of its $26.9 billion fund invested in private equity at the end of last year, according to its asset allocation report

“Private equity can be a boon to a struggling company by pooling capital, taking it to the next level, and selling it,” Torsella wrote from his personal twitter account on August 13. “But too often, private equity firms instead buy companies, load them with debt, and pay themselves off in secret while decimating a firm and a community.”

The Treasurer generally supports the plan to reform private equity that was created by U.S. Senator and Democratic candidate for president Elizabeth Warren, according to the spokesman. While not all private equity managers are bad actors, he said, Pennsylvania’s Treasury is seeking to inform the public of Torsella’s concerns about the industry, including areas such as fees, carried interest, and transparency.

This is not the first time that the Treasury office has used the Twitter account to take on private equity. On August 13, for example, the Pennsylvania Treasury tweeted about “throwing private equity swindlers out of Pennsylvania and into the ocean.”

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