Both San Jose, Calif., pension funds saw negative returns in the fiscal year ended June 30.
The $3 billion San Jose City Police & Fire Department Retirement Plan returned -0.4% and the $1.9 billion San Jose Federated City Employees Retirement System returned -0.7%, according to performance data released Aug. 23.
“It was a challenging (market) environment,” NEPC consultant Allan C. Martin told the police and fire pension fund’s investment committee Aug. 23.
The police and fire pension fund underperformed its custom benchmark of 0.3%, according to an NEPC analysis presented at the meeting, while the Federated pension fund underperformed its custom benchmark of 1%, said a report from its consultant, Meketa Investment Group.
For the three years ended June 30, the police and fire pension fund returned an annualized 4.1% compared with its benchmark of 4.4%. For the five-year period, the pension fund returned an annualized 4.4% vs. its benchmark of 4.5%.
The Federated pension fund returned an annualized 3.9% for the three years ended June 30 compared to the benchmark’s 4.1% and for five years, the pension fund returned an annualized 3.2% vs. the benchmark’s 3.8%.
Both pension funds’ annual assumed rate of return is 7%.
Separately, the investment committee of the Federated pension fund also approved recommending investing up to $15 million in Comgest’s emerging markets equity strategy. The strategy uses a bottom-up fundamental approach, according to a presentation at the meeting. The full board is expected to vote on the recommendation at its Sept. 15 meeting.