Private Equity’s Strong Performance Helps Pension Funds Across America Reach Investment Goals

As public pension funds continue to report their returns for calendar year 2021, one clear trend stands out — private equity continues to be a top-performing asset class. Private equity delivered an almost 40 percent return for the California Public Employees’ Retirement System (CalPERS), which is the largest public pension fund in the U.S. with more than 1.6 million beneficiaries. In Tennessee, private equity reported an annual return of 64.5 percent — well above other asset classes. Public school teachers in Pennsylvania and Illinois also saw private equity returns above 50 percent.

Read below to learn how private equity continues to deliver robust returns and helps strengthen the hard-earned retirements of millions of teachers and first responders nationwide.

TENNESSEE + 64%

PENSIONS & INVESTMENTS: Tennessee Consolidated returns 25.6%
“Tennessee Consolidated Retirement System, Nashville, returned a net 25.6% for the fiscal year ended June 30. For the most recent fiscal year, the best-performing asset class was private equity, which returned a net 64.5% (above its custom benchmark of 53.8%). Following were emerging markets equities with a net return of 50.7% (below its 52.4% benchmark)”

ILLINOIS + 57.2%

PENSIONS & INVESTMENTS: Illinois Teachers’ tops benchmark with 25.5% fiscal-year return
“Illinois Teachers’ Retirement System’s assets reached a new high of $63.9 billion thanks in part to a net return of 25.5% in the fiscal year ended June 30, showed a performance report from RVK, the Springfield-based pension fund’s consultant. … By asset class, private equity led returns with 57.2%, (benchmark, 48.4%); followed by global equity, 41% (40.9%)”

PENSIONS & INVESTMENTS: Illinois State Board of Investment posts 25.8% net return
“Illinois State Board of Investment, Chicago, reported a net return of 25.8% for the fiscal year ended June 30 for the $24.8 billion in defined benefit plan assets it oversees. For the most recent fiscal year, the best-performing asset class was private equity, which returned a net 54.9% for the year ended June 30 (above its 53.8% benchmark), followed by domestic equities at a net 43.4% (below its 44.2% benchmark)”

PENNSYLVANIA + 57%

PENSIONS & INVESTMENTS: PennPSERS returns 24.6%, looks at ditching hedge funds
“Pennsylvania Public School Employees’ Retirement System, Harrisburg, posted a preliminary net return of 24.6% for the fiscal year ended June 30, above its policy benchmark of 20.6%. By asset class, private equity posted a preliminary net return of 57% for the year ended June 30 (vs. its benchmark of 42.5%)”

CALIFORNIA + 39.9%

PENSIONS & INVESTMENTS: CalPERS returns 13.3% in 2021, above its benchmark
“CalPERS earned a net return of 13.3% for calendar year 2021, exceeding its benchmark by 120 basis points, according to reports to the board released Friday. The best-performing asset class for year ended Dec. 31 was private equity, with a 39.3% net internal rate of return, outperforming its benchmark by 792 basis points. Private equity outperformed its benchmark in all periods except the 10- and 20-year periods.”