This is a good comment. Just worth adding a footnote, for those interested in the richness of context:
[1] On the ERISA revisions of the late 1970's:
Employee Retirement Income Security Act of 1974 (ERISA) – With the passage of ERISA in 1974, corporate pension funds were prohibited from holding certain risky investments including many investments in privately held companies. In 1975, fundraising for private equity investments cratered, according to the Venture Capital Institute, totaling only $10 million during the course of the year. <In 1978, the US Labor Department relaxed certain parts of the ERISA restrictions>, under the "prudent man rule,"[21] thus allowing corporate pension funds to invest in private equity resulting in a major source of capital available to invest in venture capital and other private equity. Time reported in 1978 that fund raising had increased from $39 million in 1977 to $570 million just one year later.[22] Additionally, many of these same corporate pension investors would become active buyers of the high yield bonds (or junk bonds) that were necessary to complete leveraged buyout transactions.
Comments
This is a good comment. Just worth adding a footnote, for those interested in the richness of context:
[1] On the ERISA revisions of the late 1970's:
Employee Retirement Income Security Act of 1974 (ERISA) – With the passage of ERISA in 1974, corporate pension funds were prohibited from holding certain risky investments including many investments in privately held companies. In 1975, fundraising for private equity investments cratered, according to the Venture Capital Institute, totaling only $10 million during the course of the year. <In 1978, the US Labor Department relaxed certain parts of the ERISA restrictions>, under the "prudent man rule,"[21] thus allowing corporate pension funds to invest in private equity resulting in a major source of capital available to invest in venture capital and other private equity. Time reported in 1978 that fund raising had increased from $39 million in 1977 to $570 million just one year later.[22] Additionally, many of these same corporate pension investors would become active buyers of the high yield bonds (or junk bonds) that were necessary to complete leveraged buyout transactions.