Labor group warns on investing

The International Trade Union Confederation, which represents workers in 135 countries, warned pension funds about investing in private equity and hedge funds, calling for greater regulation of the industry.

Private equity funds don’t generate better long-term returns than other investments, the Brussels-based group asserted in a statement Thursday, citing research by the University of Amsterdam. The group said governments should force buyout funds to be more transparent about their assets and how much debt they use to fund their takeovers.

Labor unions, which have put the private equity industry under unprecedented scrutiny in recent weeks, are changing tack by questioning the industry’s returns for the first time. Buyout firms get about a quarter of their finances from pension funds.

The confederation “is advising pension trustees and managers to take extreme care with these casino funds,” General Secretary Guy Ryder said. “Contrary to the hype, they can bring substantial risks and in the long term many such funds have performed well below expectations.”