From Opportunity to Constraint: Structural Inequities in Public Pension Fund Investing

Abstract This study examines how structural features shape participation in private equity across U.S. state and local public pension systems. Using panel data from the Boston College Public Plans Database the analysis introduces the concept of structural asymmetries to explain persistent differences in access to illiquid investment strategies. Descriptive evidence shows that private equity participation expanded unevenly over time, with larger systems increasing exposure more rapidly after the Great Recession. Fixed‐effects models indicate that fund size and liquidity capacity are the most consistent determinants of participation, while fiduciary discipline and actuarial assumptions exhibit limited explanatory power once structural constraints are considered.