Beginning of a Superfund Era?

Michael Nobrega's suggestion of a superfund is clearly self-serving: earn fees on external funds. But does it make sense?

One might argue that it does - it would give smaller funds access to the brain trusts running the big public funds, including access to certain deals and asset classes. But is that really so? Can't smaller funds access venture capital, hedge funds and infrastructure deals by investing in funds dedicated to these asset classes? Well, the respondant argues, they could now get it at a lower fee. Even if that were the case (I believe it would be), there exists the danger of conflict of interest. Unless, of course, the funds are managed in one large pool.

Which brings me to the arguments against the superfund:

1. Asset mix- given the different nature of public vs private fund liabilities (inflation indexing), is it really appropriate to consider similar asset mixes?
2. Future Contributions- corporations must be more sensitive to ongoing concern of their entity than a government or quasi-government entity, which may lead to different risk tolerance of plan sponsors
   
3. Together We Fall - what if the "brain trust" at a superfund missteps? Recent scandals such as the ABCP blowup in Canada or Madoff in the US, which are not tied to the overall market decline, demonstrate the danger if a superfund has large exposure to a particular asset or fund. In an age where we support smaller banks in order that no single financial institution would pose significant danger economic stability, how can we advocate supersized pension funds which could just as easily wreak havoc? (Granted that it may not be as direct, since pension funds do not lend to retail, but the impact on the banking system would be substantial)