Massachusetts Pension Reserves Investment Management Board returned 15.2% in calendar year 2013, marking an investment gain of $7.9 billion, confirmed MassPRIM spokeswoman Nicole Giambusso.
The performance drove the net asset value of the Boston-based MassPRIM to $57.9 billion, the highest since its inception in 1984. It also outperformed the pension fund's benchmark index by 264 basis points, equating to $1.4 billion in added value above the benchmark.
“PRIM has successfully modified its risk exposure to equities while still capturing very strong returns from the global equity markets,” said Michael G. Trotsky, MassPRIM's executive director and chief investment officer in a news release. “Additionally, the decisions we've made on how we invest in hedge funds and alternatives have allowed us to improve performance while reducing risk and also dramatically reducing management fees.”
Global equities led all asset classes with a 24.1% return in 2013; private equity returned 21.1%; hedge funds, 12.6%; and real estate, 10.8%.
In addition to achieving strong investment performance in 2013, PRIM established the Project SAVE initiative to identify more than $100 million in value enhancements over the next 12 to 24 months. About $29 million was already saved in the fiscal year ended June 30, 2013, through MassPRIM's direct hedge fund investment program.
The pension fund's annualized three-year return is 9.54%; five-year, 11.94%; and 10-year, 7.65%.