2016 AIC Pension Fund Analysis: Private Equity Leads All Asset Classes for Public Pension Funds

Study Lists Public Pension Funds With The Highest Private Equity Returns And Allocations

WASHINGTON, DC – Private equity continues to lead all asset classes in long-term returns on investments made by U.S. public pension funds, according to new research featured in the American Investment Council’s annual Public Pension Fund Study, in partnership with private market technology firm Bison.

The study, which examines private equity investments of 155 U.S. public pension funds, spotlights the 10 pension funds with the highest private equity returns, and the 10 pension funds with the most private equity investment volume.The Teacher Retirement System of Texas earned the top spot for annualized 10-year private equity performance, returning 15.40 percent, net of fees. San Francisco Employees’ Retirement System ranked second, with private equity investments returning 15.21 percent, net of fees, and Iowa Public Employees’ Retirement System’s private equity investments generating 14.95 percent, net of fees, ranking third.

“Our annual Public Pension Fund Analysis does more than just highlight the impressive returns that private equity provides for its investors,” said Mike Sommers, AIC President and CEO. “It shows how the private equity industry helps to secure the retirement of hardworking Americans, including teachers, emergency responders, and public servants, throughout the country. These are the people private equity firms’ benefit and this is who gains from robust private equity activity.”

The report also compares private equity’s median 10-year annualized return to those gained by public equity, fixed income, and real estate. Private equity investments by public pensions outperform all of these asset classes, yielding a median level of 11.4 percent, and outpacing public equity’s 7.6 percent, real estate’s 6.3 percent, and fixed income’s 5.2 percent returns.

“The data show that private equity is the standout asset class for public pensions over the long-term, and its allocation is critical to public pensions as they seek to meet their financial obligations,” said AIC Vice President of Research and Investor Relations, Bronwyn Bailey. “Particularly now, with low interest rates and noticeable public market volatility, pension officials can turn to private equity as a source of stable, high returns for their beneficiaries.”

Click here to view the full study.

Click here to view an accompanying infographic.

About the Annual Pension Study

This study, conducted by the American Investment Council, uses data collected by Bison to examine the private equity investments of over 155 U.S. public pension funds. The information was collected either through direct communication with pension funds or from publicly available comprehensive annual financial reports.

About the American Investment Council

The American Investment Council (AIC) is an advocacy and resource organization established to develop and provide information about the private investment industry and its contributions to the long-term growth of the U.S. economy and retirement security of American workers. Member firms of the AIC consist of the country’s leading private equity and growth capital firms united by their successful partnerships with limited partners and American businesses. More information about the AIC can be found at www.investmentcouncil.org.

About Bison

Founded in 2011, Bison is a fast-growing startup company focused on developing innovative technology for private markets. With roots in solving complex challenges within private equity and venture capital, Bison’s mission has been to use the power of nimble technology and transparent data to bring unmatched, creative software solutions to the market.

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