Top 10 U.S. Public Pensions by Private Equity Investments and Returns

Private equity delivered a 12.3% annualized return to the median U.S. public pension over the last 10 years, more than any other asset class, according to the Private Equity Growth Capital Council’s annual ranking, released Thursday.

By comparison, the median public pension received a 7.5% annualized return on its total fund during the same period.

For the 10-year period, public equity returned 7.9% to public pensions, real estate 7.4% and fixed income 5.6%.

PEGCC reported that based on the 150 pensions studied, private equity investment made up 9.4% of total public pension fund investment.

Public equity dominated with 50.2% of total pension fund investment, followed by fixed income at 23%. Real estate made up 8%.

Bronwyn Bailey, PEGCC’s vice president of research, noted in a statement that private equity was the only asset class that consistently beat the 8% target return most public pensions set for their funds.  

“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,” Bailey said.

Following are PEGCC’s top 10 public pension funds that invest in private equity ranked, first, by amount invested and, second, by annualized 10-year returns.  

Top 10 Pension Funds by Dollars Invested in Private Equity

1. California Public Employees’ Retirement System: $32.3 billion

2. California State Teachers’ Retirement System: $21.9 billion

3. Washington State Investment Board: $16.2 billion

4. Oregon Public Employees Retirement System: $14.4 billion

5. Teacher Retirement System of Texas: $14.4 billion

6. New York State and Local Retirement System: $14.1 billion

7. State of Wisconsin Investment Board: $10 billion