"Private-equity firms borrow money to buy companies and then seek to maximize profit, often by reducing labor costs.... Much less attention has been given to a key backer of the private-equity industry: public-employee pension funds, which pour billions of dollars into corporate takeovers. With the stock market stalled and interest-rates at record lows, private equity deals have promised relatively high returns, which public officials need to pay benefits for workers retiring in coming decades."

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