U.S. foundations and endowments outpaced corporate and public pension plans in 2005, returning a median 8.2% for the year, according to data from the Northern Trust Universe, a database that represents the performance of more than 300 institutional investors with a combined $390 billion in assets.
Both corporate and public pension plans returned a median 7.8% last year.
"Foundations and endowments typically have higher allocations to private equity," said Joe Nardulli, product manager of Northern Trust's investment risk and analytic services, in a telephone interview. "The combination of higher allocations to private equity and considerably lower allocations to fixed income was able to propel them ahead" of pension plans.
All institutions posted three straight quarters of positive investment returns last year after a down first quarter, he said.
"We had a bumpy first quarter, but after that it was smooth sailing," he said. "We've now had three solid years of growth, specifically in the U.S. market. I'm sure sponsors are pretty pleased."
For the three years ended Dec. 31, the median corporate pension plan was up 14.5%, while public pension funds were up 14.7% and foundations and endowment rose 14.6%.