They use our pension funds for this. They also distort the market.
I do see some value in it, we need to take risks with our capital and on a long term horizon it's fine.
But there has to be some rationale behind it at least, some evidence based approach.
They don't "use" pension funds, pension funds can choose to invest in VCs if they decide to do so. I think most usually invest low single digits of investment in VCs, mostly as diversification.
Absolutely.
But I imagine there's immense pressure to do so. Returns are tracked relative to others. All distorted by big jumps in valuations. In the long term, there might be a more prudent/sustainable use of some of that capital but we'll never know, everyone's chasing share price go up, not value added / profit go up.
Yes, it's good to have your finger in the pie. But the stake may be overpriced, given current behaviour.