Pensions Piled Into Private Equity. Now They Can’t Get Out.

In exchange, they got a promise of high returns after a decade—and often received healthy cash payouts in the years before that. To keep benefit checks coming on time, those managers are unloading investments on the cheap or turning to borrowing—costly measures that eat into returns. California’s worker pension, the nation’s largest, will be paying more money into its private-equity portfolio than it receives from those investments for eight years in a row.