Public pensions continue to allocate capital toward private equity funds with confidence their beneficiaries will see robust returns.

• Public pension funds’ average allocation to private equity and other alternative investments more than doubled from 2007 to 2023, according to data from Preqin, a leading financial data provider.

• According to 2021 research, private equity provided a median annualized return of 15% over a 10-year period – a greater return than any other asset class.

• 34 million Americans depend on private equity to support their retirement, as noted by the American Investment Council.

• Making up 11% of public pension portfolios, investments in private equity provide a vital source of diversification for pension funds, maximizing returns and minimizing risk.

Public pension funds, which safeguard retirements for our nation’s first responders, frontline health workers, teachers, and other public servants, consistently turn to private equity for reliable, robust, and diversified returns that outperform public markets. Investments in private equity open the door to innovative, growing companies not available on public markets, providing public servants with access to outsized returns.

From New York to Texas to California, public pensions nationwide look to private equity to diversify their portfolios and deliver strong returns. Here’s a look at just a few funds that have increased their private equity allocations to safeguard retirements:

• New York State Common Retirement Fund commits $700 million to private equity

• Texas Teacher Retirement System increased its private equity investments by $395 million

• California Public Employees’ Retirement System (CalPERS) increased its private equity investments by $1 billion

• Pennsylvania Public School Employees Retirement System increased its private equity investments by $200 million

• Contra Costa County added $250 million in private equity investments

• Baltimore Fire & Police committed an additional $100 million to private equity

• Houston Firefighters’ Relief and Retirement Fund added $600 million to its private equity investments

• Texas Municipal Retirement System Allocates $981 Million To Alternatives

• Massachusetts Pension Reserves Investment Management Board ($650 million)

• Kansas Public Employees Retirement System increased its private equity investments by $80 million

• Ohio Police & Fire Penson Fund increased its private equity investments by $40 million

• Indiana Public Retirement System (PRS) allocated an additional $450 million to private equity

Learn more: Pension Fund Managers Know They Can Rely on Private Equity for Strong and Reliable Returns

The bottom line

With more than 90% of public pensions planning to increase their allocations in the coming years, private equity will continue to provide millions of Americans with retirement security and peace of mind.