Backdoor Socialism Update: Behind the Venture Capital Boom-Public Pensions

Bloomberg Businessweek reports:

Few agree as to whether there’s a bubble in venture capital. Bill Gurley says there is one, Marc Andreesen says there isn’t, and so forth. Either way, some journalists have been quick to note that if there is a bubble, it is different this time. Because venture capital is funded by private, wealthy investors, the thinking goes, at least mom-and-pop investors aren’t at risk.

That’s not entirely true. Public pension funds—the state-run investment pools responsible for the retirement benefits of nearly 20 million Americans—have quietly been funding the recent boom in venture capital. The investment pools are made up of tax dollars and contributions from state employees. For the last few years, they have made up the biggest single source of funds flowing to venture capital, according to the most recent Dow Jones Private Equity Analyst Sources of Capital survey. In 2014, they contributed 20 percent of the sector’s overall haul, down slightly from a 25 percent contribution in 2013.

Creeping socialism update.