PE investments most profitable for US pension funds

Private equity investments made by pension funds in the US significantly outperform those made in other asset classes, according to a report from the American Investment Council.

Yields from a 10-year private equity investment average 11.4 percent, compared with 7.6 percent from public equities, 6.3 percent from real estate and 5.2 percent from fixed income, the data show.

The report, produced annually, looked at holdings of 155 US public pension funds. It found they invest just under 10 percent of their portfolio in private equity, with the largest proportion, 45 percent, committed to public equity.

In real terms, the California Public Employees’ Retirement System has invested the largest amount of capital in private equity, $28.8 billion. The California State Teachers’ Retirement System is in second place, with $19.3 billion.

The American Investment Council is an advocacy and resource organisation established to develop and provide information about the private investment industry and its contributions to the long-term growth of the US economy