The NY Pension Fund pays hundreds of different managers to actively invest. Candidate Drew Warshaw argues this level of diversification is self-defeating, as it effectively recreates the market index but with massive fees and a worse tracking error, resulting in significant underperformance compared to simple, low-cost index funds.

Unlike traditional asset allocation where portfolio decisions are jointly owned, TPA clarifies governance. The board sets a risk appetite via a reference portfolio, but management is solely accountable for constructing and managing the actual investment portfolio, making their performance directly and transparently measurable.

The New York State Unclaimed Fund holds $20 billion of citizens' money—a figure that has nearly tripled in 18 years. Candidate Drew Warshaw frames this growth not as a large asset, but as a key performance indicator of the comptroller's failure to proactively return money to its rightful owners.

Due to their monopolistic and conservative nature, pension funds punish deviation from the peer group. Innovating is a career risk, as it requires justification for being different. Consequently, significant change rarely happens proactively; instead, it is forced upon these institutions by external market crises.

For a defined benefit pension plan, the ultimate measure of success is not outperforming peers or benchmarks. It is simply whether the plan can meet its financial obligations to beneficiaries. Failing to do so is a complete failure, regardless of how other plans performed.

Robertson managed the Tiger Fund with a centralized, "queen bee" decision-making style. This approach, successful at a smaller scale, became a critical failure point as assets grew past $20 billion, highlighting the necessity of evolving leadership and delegating responsibility during rapid growth.

Boards have a finite 'governance budget'—their collective time, skills, and capacity. This budget must be sufficient to oversee the portfolio's risk. A board with limited capacity cannot effectively govern a high-risk, complex strategy like private equity, creating a critical misalignment that jeopardizes returns.

Harvard's John Coates reveals that 'private' equity funds primarily invest public money from pensions and endowments. The 'private' label is a brilliant marketing strategy that allows them to avoid the public disclosure and scrutiny that should accompany managing millions of workers' savings.

When a public pension fund underperforms its benchmarks, the state is legally required to make up the shortfall. Candidate Drew Warshaw argues this funding comes directly from taxpayers through higher property and state income taxes, effectively creating a hidden tax to subsidize poor investment management.