New AIC Study: Private Equity Strengthens Retirement for Teachers, Firefighters and Other Public Servants

Washington, D.C. – Today, the American Investment Council (AIC) released its annual Public Pension Study, which examines the investments and returns of America’s largest public pension funds. Private equity was once again the best performing asset class for public pensions, delivering a median annualized return of 13.7 percent over a 10-year period.

Public pension funds aim to provide a secure retirement for civil servants, including teachers, firefighters, sanitation workers, bus drivers, and doctors and nurses in public hospitals. The AIC study examined 176 U.S public pension funds, which represent more than 30 million public sector workers and retirees. 85 percent trusted private equity with their members’ retirement savings.

The Illinois State Board of Investment had the best performing private equity portfolio, earning a 16.70 percent annualized return for public servants in the Land of Lincoln, net of fees.

The Massachusetts Pension Reserves Investment Trust, Iowa’s Public Employees’ Retirement System, and the Public School and Education Employee Retirement Systems of Missouri rounded out the top four, all delivering returns of at least 16 percent net of fees.

Mass PRIM’s private equity program has performed extremely well over the long term for our beneficiaries who count on us to deliver strong investment returns,” said Michael G. Trotsky, CFA, Executive Director and Chief Investment Officer of Mass PRIM. “We are very pleased that since AIC began this study in 2012, Mass PRIM has consistently ranked in the top five, reinforcing the importance of our private equity portfolio to our overall performance. Partnering with the industry’s top investment managers allows us to gain exposure to companies that have the potential to provide strong long-term returns.”

Drew Maloney, President and CEO of The American Investment Council, released the following statement:

Public pensions represent a basic promise and a sacred trust to our essential government workers. Even as they themselves face personal hardships and uncertainties, civil servants continue to provide vital services during these unsettling times. Private equity plays an important role in making sure we keep our promises to public employees, providing long-term retirement security by delivering strong returns for public pensions year after year.”

The full report, including rankings of the Top 10 public pension funds by both private equity returns and dollars invested in private equity, is available here.

On Tuesday, July 21, the AIC is sponsoring an event hosted by the Hill Newspaper to highlight the role of private capital in today’s economy. Please RSVP to attend here.