Isn’t it amazing that a guy like Bruce Rauner, Rahm’s best buddy and the guy who attacks teachers unions and teacher pensions as if it is a blood sport, has made lots of bucks off of teacher pensions?
Mr. Rauner, a millionaire who retired as GTCR chairman last year in anticipation of a run for the state’s top office, led a firm with more than $10 billion under management largely from public pensions nationwide, including the biggest in Illinois. After earning millions of dollars from this work, Mr. Rauner says he wants to use his insights to overhaul the state’s pension system, the worst in the country in terms of meeting its obligations, with an estimated $100 billion shortfall.
Crain’s goes on:
GTCR has managed money for years for the Illinois Teachers’ Retirement System and the Illinois State Board of Investment, the largest and third-largest, respectively, in Illinois, as well as state and municipal pension plans from the San Francisco City and County Employees’ Retirement System to the Massachusetts Pension Reserves Investment Management Board. Its funds have delivered above-average returns for Illinois, according to Preqin Ltd., a London-based investment data provider.
For its work, GTCR takes a slice of returns it reaps from business sales, typically about 20 percent, and charges management fees, up to 1.5 percent. The Illinois State Board of Investment, for instance, reports it paid $280,000 in fees last year on $85 million it has in two GTCR funds.
Combined, TRS and the ISBI have committed $252 million with GTCR since 1993.
I think I’ll skip asking TRS Communications Director Dave Urbanek any questions about this. He clearly resents TRS members like me asking questions about the money we paid into the system for our retirement.
I mean, whose money is it, anyway?
Oh. Wait. It’s ours.
He’d probably ask me, “Where are you going with this?”
Fred Klonsky 
Thank you and continue to expose these truths. This is Rahm’s best friend. These money men can’t get enough of our pensions!
Above average returns for less than 1% in fees.
You got a bargain.
Thanks Bruce.
See the Rolling Stone article on guys like R.
http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926
Thanks. Great story. I just sent the link to Ann Williams and John Cullerton.
Fred,
Thank you for exposing the likes of those who reap benefits from our pension system. Can you clarify the 20% Rauner made on “business” sales as referenced in the Crain’s article? 1.5% is average for “managing” portfolios, the 20% figure sounds like it could run into lots of money and how much did he really charge? The article gives the total for the “management fees” but not the 20% the firm “takes” for sales. I guess I will just have to contact TRS to find out.
Public pension funds (not just ours) made him rich and Rauner opens charter schools with state money and his name on the school.
What I know about him so far from the press:
Rauner claimed three home owner exemptions on properties in Cook County.
Rauner “pulled strings” to get his daughter into Walter Peyton Prep.
Rauner’s sign company has installed small neon signs in Chicago neighborhoods. The signs fall under the radar of Chicago sign regulations because of their smaller sizes. The signs have seriously impacted the lives of people who have a blinking image beam into their livingrooms from sunup to sundown.
Looking forward to learning more about him.
As for the pension management fees + “sales” fees of 20%. I think that might be enough to start a revolution.
As Sen. Warren says “The game is rigged.”
After reading the article in Rolling Stone suggested by Elaine Hopkins, I learned that Rauner’s fees were similar to the very expensive hedge funds described in the article – 2% of the total from management and 20% of the profits earned. No wonder Rauner has so much money. The article is very enlightening.