With this number, there is no question that the asset class has helped secure pension benefits for California’s 1.7 million current and future retirees. And, in so doing, private equity has also benefited every taxpayer in California. Yet, long before the data release, critics of the private equity industry were drumming up controversy over the profit sharing arrangement, known as carried interest. But the critics missed the point. Contrary to the political rhetoric, carried interest is not a fee paid by investors. Rather, carried interest is a profits interest – typically 20 percent – to which private equity general partners...