ICYMI: Media Coverage of New AIC Pension Study that Shows Private Equity Delivers the Strongest Returns

AIC report found private equity to be the best returning asset class for public pensions, delivering median annualized returns of 15% over a 10-year period

WASHINGTON, D.C. – This week, the American Investment Council released its 2022 public pension study showing that private equity delivered the strongest returns for public pensions portfolios. In 2021, private equity investments delivered a median annualized return of 15 percent over a 10-year period for public pension funds across America that partner with private equity – a greater return than any other asset class.

For the third year in a row, the Illinois State Board of Investment had the best performing private equity portfolio, earning a 19.8 percent annualized return for public servants in Illinois, net of fees. The West Virginia Investment Management Board, Massachusetts Pension Reserves Investment Trust, Public School & Education Employee Retirement System of Missouri, and the Iowa Public Employees’ Retirement System earned spots two through five, respectively, all delivering returns above 18 percent, net of fees.

See below for press coverage of the report.

Crain’s Chicago BusinessA bit of good news on Illinois pensions: Here’s a bit of good news about the performance of Illinois’ cash-strapped pension funds, and though nirvana has not arrived, officials will happily take it. The Illinois State Board of Investment was the number-one ranked public pension unit in the country in the year ended June 30, 2021, racking up a nifty 19.8% annualized return over the past 10 years on its private-equity investments, net of fees. That’s according to the American Investment Council, a trade group that’s an advocate for pension funds putting their money not in the stock market or fixed-income securities but private-equity offerings. The return was more than a full percentage point above all but two other public systems, in West Virginia and Massachusetts, with ISBI now ranking best in the country for the third year in a row. [7/12/22]

Pensions & Investments Private equity allocation helps public pension plans: U.S. public pension plans had 11% of their assets invested in private equity, and 89% had some amount allocated to the asset class, according to the American Investment Council’s 2022 Public Pension Study. Public equity and fixed income, combining for 68%, had the largest share. The median 10-year annualized private equity return among public pension funds that the AIC examined was 15.1%. This return was better than other major asset classes, such as public equities’ 11.8%. [7/13/22]

Financial Regulation NewsAmerican Investment Council releases findings from public pension study: The survey involved analyzing 176 domestic public pension funds representing nearly 34 million public sector workers and retirees, with 89 percent of public pensions in the sample possessing some exposure to private equity. “Public pensions represent a promise to take care of the public servants who take care of us,” AIC President and CEO Drew Maloney said. “In order to offer retirement security for dedicated public servants, these funds must consistently generate strong investment returns. Almost all of them turn to private equity for help.” [7/13/22]

Buyouts Insider PE ranks as strongest asset class for pensions over the past decade, survey says: According to the report, private equity delivered a 15 percent median annualized return over the past 10 years. During the same period, total funds returned 9 percent while public equity brought back 11.7 percent. “I think the 10-year number was an impressive number, along with the expansion of funds increasing their allocation to private equity. Both of those were a very pleasant outcome,” said Drew Maloney, president of the American Investment Council. [7/12/22]

Ogden Newspapers in West Virginia: According to the American Investment Council, the West Virginia Investment Management Board ranked 2nd in the nations top 10 public pension funds based on private equity returns. [Tweet, 7/12/22]

WBNS-TV in Columbus Ohio: According to the American Investment Council: Ohio School Employees Retirement System ranked 7th in the U.S. for the best performing private equity portfolio, with a 10-year annualized return of 17.7 percent, net of fees. [Tweet, 7/7/22]


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