Private equity is a key component of investment strategies for leading pension and retirement funds.

• A recent report from Preqin, a leading financial data provider, showed that 95% of investors expect to make private equity allocations in 2023. Looking even longer term, 94% of investors expect to maintain or increase their pace of capital deployment into the asset class.

• According to the American Investment Council, 34 million American public servants rely on private equity to support their retirements.

• Over a 22-year period, private equity allocations by state pensions produced returns that outpaced public stock investments by nearly double, according to a recent study from Cliffwater.

• 93% of public pensions plan to increase their private equity allocations.

In states and municipalities across America, committed professionals who manage pension and retirement funds consistently turn to private equity for consistent and robust returns that outperform public markets.

Through pension and retirement funds, private equity helps deliver for our nation’s firefighters, police officers, frontline health workers, teachers, and other public servants – offering millions of Americans retirement security and peace of mind.

Contrary to recent reporting, here’s what a few fund managers are saying about why private equity is the right fit for their fund and beneficiaries:

• “Since our alternative program was started in private equity, real estate, hedge funds, and real assets, through the crash and the comeback in markets, private equity has been the top performer with 30 percent total return, including the financial crisis.” – Bob Grady, Former Chairman, New Jersey State Investment Council
  
• “Ohio SERS is pleased to be ranked among the top ten in Private Equity returns for the ten years ending June 30, 2021, with a return of 17.6%. Our private equity portfolio has consistently generated the highest return in the SERS portfolio over rolling 10-year periods for many years and has contributed to the long-term sustainability of the pension plan. The strategy pursued by staff in target markets has been successful and has also resulted in lower fees.” – Farouki Majeed, Chief Information Officer (CIO), Ohio School Employees Retirement System (Ohio SERS)
  
• “A long-term commitment and investment in the private equity asset class has enhanced our ability to deliver on our mission of providing retirement security to Missouri’s educators and education employees after a full career of service. Private equity, within the Missouri PSRS/PEERS investment portfolio, has produced net of-fees returns significantly greater than the returns achievable in publicly traded stocks over all time periods.” – Craig Husting, CIO, Public School & Education Employee Retirement Systems of Missouri
  
• “Over the longer term, that kind of outperformance [provided by private equity] represents real skill, not luck, and it’s worth paying for.” – Joe Dear, Former CIO, California Public Employees’ Retirement System (CalPERS)
  
• “CalPERS is committed to giving access and opportunity to new and innovative talent in the investment industry…We want to create and nurture an ecosystem that will serve as a catalyst to seed the next generation of diverse talent and foster different ways of seeing and solving problems…We welcome and encourage other global allocators to join us in this effort and reimagine the traditional and structural dynamics in the markets.” – Nicole Musicco, CIO, CalPERS
  
• “We are very confident in the prospects for private equity investments in our long-term investment mix. Private equity opportunities far exceed those available in stock market investing for the foreseeable future and are a welcome addition to our portfolio diversification effort.” – Brett Besselman, Chairman of the Board of Trustees, Houston Firefighters’ Relief and Retirement Fund
  
• “Amid a challenging market environment, we believe this [increasing public pension allocations to alternative assets, like private equity] is the most significant long-term adjustment we can make to safely maximize returns. I look forward to working in collaboration with each of our City’s public pension boards to deliver strong returns for New York City’s pensioners.” – Brad Lander, Comptroller, City of New York 

The bottom line

Private equity delivers strong, reliable, and robust returns for everyday Americans, including those who rely on public pension portfolios for retirement benefits. With returns that continually outpace index funds and public equities, it’s no surprise that nearly 9 out of 10 public pension funds choose to invest with private equity – with the majority looking to increase their allocations.