Local Pension Funds Should Invest Farther Afield

WE ALL have a local bias. We root for the Patriots, invite our neighbors for dinner, and, if we invest, we bet on US companies. Public pensions have a local bias too: 44.2 percent of private equity investments by public pensions in Massachusetts are placed with funds headquartered in the state. This is troubling, because those investments have historically earned, on average, 8.62 percent less annually than out-of-state investments, which means that local bias could be costing our pension funds more than $150 million each year.