Searches and Hires

Virginia commits $1.2 billion, returns 12.1% in fiscal year

Virginia Retirement System, Richmond, committed $1.12 billion to private equity in recent months, along with $70.4 million to real assets, according to an announcement at a board of trustees meeting Tuesday.

In private equity, the $74 billion pension fund committed $270 million to Apollo Investment Fund IX, a buyout fund managed by Apollo Global Management, and $250 million to buyout fund Bain Capital Fund XII.

VRS committed $200 million each to NGP Natural Resources XII, managed by NGP Energy Capital Management, and Virginia Asia Investors II, an Asia-focused private equity fund of funds managed by Asia Alternatives Management.

Apax Digital Fund, a global buyout fund managed by Apax Partners, received a commitment of $150 million, and ICV Partners IV, a buyout fund, received a $50 million commitment.

In real assets, iCON Infrastructure Partners IV received a $70.4 million commitment.

Separately, the pension fund reported a 12.1% return for the fiscal year ended June 30. The fund's policy benchmark returned 11.8%; its assumed rate of return is 7%.

In the fiscal year ended June 30, private equity returned 20.6%, followed by public equity at 17.7%; real assets, 10.8%; credit strategies, 10.1%; and strategic opportunities, 8.2%. Fixed income returned 0.5%.

VRS has 41.5% of its portfolio in public equity, 17.7% in credit strategies, 16.8% in fixed income, 12.8% in real assets, 8.8% in private equity and 2.4% in its strategic opportunities portfolio, as of June 30.

Chief Investment Officer Ronald Schmitz said in a statement that the system focuses more on returns over 10-, 20- and 25-year periods, "and has exceeded the policy benchmarks for those periods" as well.

For the three, five, 10 and 20 years ended June 30, the pension fund returned an annualized 6.2%, 9.1%, 4.9% and 7%, respectively. It returned 1.9% in the previous fiscal year.

Board Chairman Mitchell Nason said in the same statement that a strong market environment and the fund's performance "helped VRS investment staff generate a very meaningful return toward the growth of the fund." Two-thirds of retirement benefits are funded through investment returns.