What They Are Saying: Private Equity Delivers Robust Returns for Public Pension Beneficiaries

Earlier this week, the American Investment Council 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. These robust returns help support the retirements of public servants across America, including police officers, firefighters and teachers. In the following days, several public pension funds have issued statements reaffirming their commitment to private equity. Read some of these quotes below:


INSTITUTIONAL LIMITED PARTNERS ASSOCIATION: “Today @AmericaInvests released a Public Pensions performance study. #Privateequity has been, and continues to be, a critical ingredient to the long-term investment success of public pensions and many other institutional investors.”

ILLINOIS STATE BOARD OF INVESTMENT (ISBI): “ISBI strives to manage its portfolio with a long term investment mindset, leveraging multiple asset classes, including private equity, to meet its ongoing risk-adjusted return objectives. We are proud to be recognized as the top performing pension fund for private equity in AIC’s 2020 Public Pension Study. The ongoing success of our innovative investment model looks to thoughtfully control fees while simultaneously delivering strong investment returns for the fund’s 165,000+ beneficiaries. We hope to replicate these past successes in future periods while continuing to spearhead efforts in changing the landscape of diversity and inclusion within the industry.

MASSACHUSETTS PENSION RESERVES INVESTMENT MANAGEMENT BOARD (MASS PRIM): “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.”

THE PUBLIC SCHOOL AND EDUCATION EMPLOYEES RETIREMENT SYSTEMS OF MISSOURI (PSRS/PEERS): “PSRS/PEERS’ have a successful, long-standing Private Equity Program with early fund commitments dating back to 2003.  PSRS/PEERS has consistently allocated to the asset class across market conditions since inception of the Program and these investments have been a substantial source of added value for the total Plan.  Today, the Systems’ cumulative investments in private equity exceed $11.0 billion.”

ARIZONA PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM (PSPRS): “PSPRS private equity investments – which include the buying, improving, and selling of assets like businesses and other venture investments – generated an annualized return of 15.44 percent over the 10-year period between fiscal years 2009 and 2019. The net-of-fee returns ranked PSPRS eighth overall out of 176 pension plans with more than $1 billion in assets, according to the American Investment Council … “For a system like PSPRS, private equity investments can bring high returns while helping to safeguard our portfolio from swings in the public markets,” said Chief Investment Officer Mark Steed. “We’re gratified by this recognition, but even more importantly we’re gratified by the impact that the system’s private equity success has on our mission to support our members, retirees and the state of Arizona.”

Pension fund managers across America are speaking out on why they include private equity as part of their diversified investment portfolio. Marcie Frost, CEO of the California Public Employees’ Retirement System, recently appeared on CNBC to reiterate that, “private equity remains an important component of our asset allocation.” Minnesota State Board of Investment CIO Mansco Perry also recently appeared on CNBC telling viewers, “we’ve been private equity investors since 1981 and that’s paid off very well.”

Click here to read the recently released report from the American Investment Council examining how private equity strengthens retirement for teachers, firefighters and other public servants.