The alarm bells are ringing: the $400 billion in workers’ retirement dollars that public officials have invested in private equity could be on the verge of crisis, as the market downturn hits the alternative investments. Last month, the private equity analysts at PitchBook warned that “private equity returns are a major threat to pension plans’ ability to pay retirees in 2023.” Meanwhile, a top pension expert told Bloomberg, “The whole system is set up to fail.”

Poppycock, say some experts. Write-downs will be minimal, claim alternative investment advisors. Doubling down on private equity “is the most significant long-term adjustment we can make to safely maximize returns,” New York City comptroller Brad Lander recently announced. Other government officials appear to agree, pumping an ever larger share of public pension dollars into private equity. After all, these assets have a history of sterling returns — why would they run into trouble now?

The problem is that private equity portfolios are not only opaque, but also built on illiquid assets — investments like restructured companies that have no transparent public valuation and cannot be easily converted into cash. To understand why this is so dangerous, let’s look to an unlikely source: a scandal across the Atlantic involving the original manuscripts of some of the world’s most famous literary works, from André Breton’s surrealist manifestos to Charlotte Brontë’s early writings to a long-lost scroll of the Marquis de Sade.