New Report Reveals Top 10 Pension Funds by Private Equity Returns and Investments

Judge: “Pensioners from across the country are benefiting from the superior returns that private equity consistently provides to their funds year after year.”

Washington, D.C. – The Private Equity Growth Capital Council (PEGCC) released its annual ranking of large public pension funds today, revealing which pensions generated the highest rate of return from their private equity portfolios, and which ones invested the most in private equity.

The report found that the Teacher Retirement System of Texas rose to first place in the ranking of private equity investments, up from third place in last year’s report.  The Texas pension’s 10-year annualized private equity return was 18.2 percent, followed by the Massachusetts Pension Reserves Investment Trust (17.8 percent), and the Minnesota State Board of Investment (16.2 percent).

Other rankings and key findings include:

  • Private equity delivered a 12.3 percent annualized return to the median public pension over the last 10 years, more than any other asset class. By comparison, the median public pension received a 7.9 percent annualized return on its total fund during the same period.
  • CalPERS currently invests the most capital ($32.3 billion) in private equity compared to all other pension funds in the country. CalSTRS and the Washington State Investment Board invests the second and third greatest amounts ($21.9 billion and $16.2 billion, respectively) to private equity funds.
  • Based on the 150 pensions studied, private equity investment makes up 9.4 percent of total public pension fund investment.

“Pensioners from across the country are benefiting from the superior returns that private equity consistently provides to their funds year after year,” said Steve Judge, president and CEO of the PEGCC. “Over the long-term, private equity is the best performing asset class for pension funds, enhancing the retirement security for millions of hardworking teachers, police officers, firefighters, and administrators.”

“Our research shows that private equity is the only asset class that consistently beats the 8 percent target return that most public pensions set for their funds,” said PEGCC Vice President of Research Bronwyn Bailey.  “Private equity’s outperformance helps to offset the volatility and lower returns of other asset classes and alleviate financial strain for the fund, their members, and the constituents who support them.”

The PEGCC’s annual pension report is compiled using information from publicly available 2013 annual and quarterly financial reports from the 150 largest public pension funds as compiled by Bison (  Private equity returns are reported net of management fees and carried interest.  Performance calculations for other asset classes include returns that are both gross and net of fees on marketable securities.

You can view an infographicinteractive map and the full report by clicking on the links.