Much ink has been spilled of late in Canada on the performance of the public pension plans, since OMERS and the Caisse have released their results with HOOPP and Teachers' coming up. While I read a great deal about the fact that Caisse may have overestimated their performance, much of the discussion centred around ABCP. Wherefore art the questions on real estate, private equity and other illiquid assets? How are these valuations being set?
I recently spoke with a partner at a private equity firm who told me that he wrote down their portfolio by 15% in 2008. When asked how he got to that number, he licked his index finger and stuck it in the air to indicate that the entire process is very subjective. Needless to say, the last thing we need are valuations which are determined by those people whose bonuses are dependent on said valuations.
Hence the recent discussions by FASB
https://www.fis.dowjones.com/WebBlogs.aspx?aid=DJFVW00020090219e52k000jj&ProductIDFromApplication=&r=wsjblog&s=djflbo
and
http://blogs.wsj.com/privateequity/2009/02/19/fasb-vs-pe-industry-round-two/
anybody know what the CICA is doing on this front?
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