Texas Employees Retirement System, Austin, surpassed its benchmark returns for periods ended Dec. 31, materials for Tuesday’s board of trustees and investment advisory committee meetings showed.
The $25.6 billion pension fund returned 1.3% during the quarter ended Dec. 31, compared to 1% for the benchmark; and 5.5% for calendar year 2014, surpassing the 5.3% benchmark return. Over longer time periods, annualized returns were three years, 10.6% (benchmark, 10.5%); five years, 8.7% (benchmark, 8.6%); and 10 years, 6.2% (benchmark, 5.9%).
For the one-year period, private equity was the top performer, which returned 15.6%, followed by domestic equity, 12.3%, and real assets, 12.1%. Other asset classes that produced positive returns were hedge funds, 4.9%; global credit, 3.4%; and rates, 3%. International equity returned -4.3% for the year.
Despite its strong positive return, domestic equity trailed its internal benchmark by 79 basis points, while international equity trailed the -3.9% return of its benchmark by 40 basis points for the year ended Dec. 31.
Global credit, on the other hand, outperformed its benchmark by 96 basis points and the rates portfolio topped its benchmark by 45 basis points over the 12-month period.
Texas ERS does not use internal benchmarks for comparison of the returns of its private equity, real assets and hedge fund portfolios.