Warren Buffet Tells Pensions and Endowments to Cut Management Fees
Warren Buffett has a word of advice for pension funds and endowments: cut out those high-fee “helpers,” namely consultants, outside managers, and others he deems a drag on returns.
In Berkshire Hathaway’s latest annual letter, Buffett describes US growth over the last 77 years. Why 77 years? That refers to when he bought his first stock: three shares of Cities Service for $114.75. And he did a little math regarding public pension funds and college endowments.
“If my $114.75 had been invested in a no-fee S&P 500 index fund, and all dividends had been reinvested, my stake would have grown to be worth (pre-taxes) $606,811 on January 31, 2019 (the latest data available before the printing of this letter),” he wrote. “That is a gain of 5,288 for 1.”
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