Massachusetts Pension Reserves Investment Management Board had the best combined five- and 10-year annualized private equity returns among public pension funds with at least $1 billion in assets for the end of fiscal year 2012, according to a report from the Private Equity Growth Capital Council.
The $53.9 billion Boston-based pension fund had a 9.1% five-year return and 15.4% 10-year return. In second place was the $42 billion Los Angeles County Employees' Retirement Association, Pasadena, Calif., followed by the $115.9 billion Texas Teacher Retirement System, Austin; $3.5 billion Houston Firefighters' Relief & Retirement Fund; and the $52.1 billion defined benefit plans of the Minnesota State Board of Investment, St. Paul.
The entire top 10 had five-year returns between 6.2% and 10.2%. LACERA had the highest five-year return at 10.2%. Texas Teachers was the top 10-year performer at 15.5%; all 10 pension funds were at 12.7% or higher. All the returns are annualized.
PEGCC analyzed 146 public pension funds with at least $1 billion in assets. Reporting dates vary between June 30, 2012, and Dec. 31.
According to the report, the 146 pension funds had a combined 10.3% allocation to private equity. For the 10 years ended June 30, private equity for the pension funds had annualized returns of 10%, compared to real estate, 6.7%; fixed income, 6.6%; and public equity, 5.8%. The total return for the funds was 6.5%.
