NY pensions chief hits at private equity

By the Editorial Team · Wednesday, October 21, 2026

Monte Tarbox, CIO of New York City’s $326 billion pension fund, criticized rising private equity fees—including charges like private jet travel—and expressed concerns about the shifting focus toward retail investors undermining institutional partnerships. He warned that the mismatch between retail investors’ liquidity expectations and private equity’s long-term investment horizons could lead to a financial crisis, highlighting growing tensions in the industry’s changing investor base.

The chief investment officer of New York City’s largest pension fund has expressed growing concerns about rising costs and evolving dynamics within the private equity industry. Monte Tarbox, who oversees the city’s $326 billion Retirement Systems portfolio, criticized a "steady creep" in fund expenses, including charges for private jet travel, which he said undermine confidence in private equity managers' alignment with investors' interests.

Speaking at the Future of Asset Management North America conference in Boston, Tarbox described a recent request from an unnamed private equity firm asking his pension plan to cover employee private jet expenses. He suggested such costs should be absorbed within the ordinary investor fees, viewing the accumulation of these charges as symptomatic of a broader trend increasing friction between institutional investors and private equity firms.

Tarbox linked these shifting terms to the influx of retail investors into private equity, a trend that is reducing the dominant role traditionally held by large institutional investors such as pension funds. He warned that the industry’s focus on expanding its asset base might be coming at the expense of established partners. "I am losing confidence that they are keeping us at the core of their strategic operations," Tarbox remarked, adding skepticism toward claims that the firms' intentions go beyond mere asset gathering.

A central concern highlighted by Tarbox relates to the "liability mismatch" inherent in retail private equity investments. Unlike institutions, which typically manage long-term commitments aligned with their liabilities, retail investors often expect quicker access to their funds, a difference that Tarbox cautioned could precipitate a financial "crisis in the not too distant future."

The private equity sector, meanwhile, argues that opening the strategy to retail investors democratizes access to a market previously limited to large institutions. They maintain that private equity offers these investors diversification and historically strong returns. Major players in the industry, including Blackstone and KKR, have increasingly targeted wealthy individuals to fuel growth, creating large funds specifically designed for such retail participation.

This shift has faced challenges, as seen with Partners Group, a pioneer in retail private equity funds, which recently experienced significant investor redemptions. In response, the Switzerland-based firm separated underperforming assets from newer, more promising deals within its €6.6 billion European fund designed for affluent individual investors. The move followed the firm’s decision to restrict investor redemptions amid strong demand for withdrawals.

The evolving landscape underscores tensions between long-term institutional partners and the expanding role of retail investors in private equity, raising questions about fee structures, fund management priorities, and investment horizons within the industry.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.