A new report by the e-mail newsletter The Insider is raising questions about whether state pensioners are getting the best value from alternative and real estate investments entered into by State Treasurer Richard Moore.

Moore has gotten attention for taking campaign contributions from executives of the investment firms that he hires to manage state pension assets. Forbes magazine and the Charlotte Observer have reported that employees of about half the firms have contributed to Moore, a likely candidate for governor in 2008.

Most of those contributions have come from the managers of hedge funds, venture capital funds and real estate investments, even though their investments make up just 6.5 percent of the $73.3 billion in state pension funds. According to The Insider, Moore's office spends markedly more in fees — on a percentage basis — for alternatives and real estate compared with traditional stock investments.

The e-mail newsletter, which is owned by The News and Observer Publishing Co., analyzed figures the treasurer's office provided to legislative staff. According to the Insider, which looked at figures for the first seven months of the fiscal year, the treasurer spent:

- $24.5 million in management fees for $43.7 billion in stock-investment pension funds; - $16.9 million in management fees on $1.85 billion in venture capital and hedge funds; - and $18.2 million in fees on $3.1 billion in real estate fund investments.

On a ratio basis, Moore's office spent $1 in management fees for every $1,788 invested in stocks, compared with $1 in management fees for every $107 in alternatives invested and $163 for real estate fund investments.

Moore spokeswoman Sara Lang told The Insider that alternative and real estate investments carry higher fees because of their complexity and the additional expertise required to make the investments. The fees paid by the North Carolina Retirement System are in line with those paid by other large public pension funds, she said in an e- mail response to questions.

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