Public pension funds in Pennsylvania, Kentucky, Kansas and Missouri all reported strong investment gains for their fiscal years ended June 30.
The Pennsylvania Public School Employees' Retirement System, Harrisburg, returned 14.59% for the year. Private equity had the strongest return for the $45.9 billion system, returning 22.39%, according to a news release.
U.S. fixed income ranked second, at 21.43%, followed by U.S. equities at 18.29%; absolute return, 15.6%; non-U.S. equities, 15.07%; global fixed income, 14.43%; and commodities, 5.93%.
Real estate was the only asset class to post a negative return — -10.3% — for the year ended June 30.
Spokeswoman Evelyn Tatkovski was not available to provide details.
The Kentucky Retirement Systems, Frankfort, returned 15.81% on its investments for its fiscal year, confirmed Brent Aldridge, interim chief investment officer.
The system beat its benchmark return of 13.16%, ending fiscal year 2010 with $12.8 billion, Mr. Aldridge said.
Alternatives returned 26.75% vs. the 20.15% benchmark; domestic equity, 16.9% vs. 16.18%; international equity, 12.07% vs. 10.97%; fixed income, 11.8% vs. 9.52%; absolute return, -1.42% vs. 1.98%; and real estate, -2.92% vs. -9.6%.
The Kansas Public Employees Retirement System, Topeka, returned 14.9% on its overall portfolio for fiscal year 2010, confirmed Robert “Vince” Smith, chief investment officer of the $11.2 billion fund.
It's a significant turnaround for the fund, which had a loss of 19.6% for fiscal year 2009, Mr. Smith said in a telephone interview.
The fund beat all of its policy benchmarks for fiscal 2010 except for the alternatives asset class, Mr. Smith said.
Domestic equities returned 18.1%, vs. the 15.7% benchmark; international equities, 10.9% vs. 10.5%; global equities, 12.7% vs. 12.3%; domestic fixed income, 17% vs. 10.6%; real return, 12.3% vs. 9.5%; and real estate, 12.1% vs. 7.4%.
Alternatives returned 10.3%, under its benchmark of 18.7%, but Mr. Smith noted the asset class returned an annualized 2.2% for the three-year period ended June 30 vs. an annualized -6.4% for its benchmark.
“I think we had a good asset mix this year; our fixed-income portfolio performed really well,” Mr. Smith said.
The $7 billion Missouri State Employees' Retirement System, Jefferson City, returned 14.3% for the fiscal year ended June 30, exceeding its assumed rate of return of 8.5% by 5.8 percentage points, confirmed Christine Rackers, system spokeswoman.
The system's 10-year annualized return was 4.9% as of June 30, almost doubling its policy benchmark return of 2.6%.
Private investment — consisting of private equity and private debt — was the best-performing portfolio category in the fiscal year, returning 19.3%; followed by public debt at 14.8%; public equity at 14.3%; hedge funds at 12.6%; and real assets at 7.4%.
The overall investment portfolio generated $887 million for the fiscal year, Gary Findlay, executive director, said in a news release.