ICYMI: Private Equity “Led the Way” for Pensions Across America

Over the last several weeks, public pension funds across America have announced their returns for the past fiscal year. The returns show that private equity continues to support the retirements of teachers in California, first responders in Arizona and public servants across the country. Below is a roundup of public pensions that have been supported by private equity.


Arizona Public Safety Personnel Retirement System (PSPRS)PSPRS private equity performance honored
Investments in private equity, which consists of the buying, improving and selling of private assets, such as businesses, by PSPRS generated an 11.36 percent return over the 10-year period between fiscal years 2008 and 2018.


Chief Investment OfficerSFERS posts 7.81 percent return
The report details that the $25.7 billion system’s strong private equity returns of 17.4 percent helped propel overall returns, despite mixed public equity returns. At 21 percent, the San Francisco system has one of the largest allocations to private equity among public pension plans in the US, so the high returns were able to play an outsized role in helping the retirement system with its overall returns.”

Pensions & InvestmentsCalSTRS tops fiscal-year benchmark with 6.8% return
Private equity, at 10.5 percent, had the highest fiscal year return, besting its 9.6 percent benchmark.”

Pensions & InvestmentsSanta Barbara County sees 7.74 percent return for Fiscal year
By asset class, private equity led the way with a net return of 13.64 percent for the fiscal year ended June 30, according to a flash report posted on the pension fund’s website.”


Chief Investment OfficerMaryland plan misses target, lowers assumptions
The standout performer was again private equity, returning 13.7 percent over the period. It was also the only space to reap double digits, although rate-sensitive assets came close at 9.3 percent. ‘The System’s returns reflect strong performance of private equity assets and nominal fixed income assets along with positive but more modest returns in the remainder of the asset classes,’ said Andrew C. Palmer, the fund’s chief investment officer.”


Chief Investment OfficerMass PRIM misses fiscal benchmark by a hair
The fund is known for its private equity investments, and the asset class didn’t disappoint, boasting the strongest returns for the year at a seismic 18.51 percent.”


Pensions & Investments: Nevada PERS outperforms benchmark with 8.5% yearly return
By asset class, private equity led the way with a net return of 18.4 percent.


Pensions & InvestmentsOhio School Employees tops benchmark with 6.62 percent return for fiscal year
Among asset classes whose returns were available, private equity had the highest preliminary return, at a net 15.17 percent for the most recent fiscal year.”


Pensions & Investments: Oklahoma Teachers posts 4.76 percent return, falling well short of benchmark
On the plus side, the fund benefited from strong performance in both private equity and non-core real estate, which earned 19.56% and 20.17%, respectively, for the year ended June 30.

Public pension funds committed almost $5 billion to private equity in June alone. This represents a 19 percent increase from May and is higher than any other private markets asset class.

Last month, the American Investment Council (AIC) released its 2019 Public Pension Study, which analyzes investment returns by 165 U.S. public pension funds and highlights how private equity continues to deliver the highest returns of any asset class.

The study shows private equity continues to lead all asset classes in long-term investment performance, with private equity’s median 10-year annualized return of 10.2 percent surpassing public equity’s 8.5 percent and real estate’s 4.8 percent.

  • Private equity returns strongly support the retirement plans of teachers, firefighters, police officers and dedicated public servants in all 50 states,” said Drew Maloney, AIC President and CEO. “Public pension funds across America partner with private equity because our industry has a proven track record of maximizing returns while providing stability.”

Read an op-ed from Drew Maloney in The Detroit News discussing the pension report here.

Read the full 2019 AIC Public Pension Report here.