Private equity is the top gainer for the Iowa Public Employees’ Retirement System (IPERS)

September 13, 2019 | Private Equity

Private equity boosts a nearly 20% gain for the last fiscal year

The Iowa Public Employees’ Retirement System (IPERS) enjoyed a healthy boost from private equity last year. The group secured a healthy 19.18% gain on its private equity asset class. This return powered an overall return of 8.35% during the last fiscal year.

As a result, the fund’s returns were 9.3%, 6.77%, and 9.60% across the three-, five-, and 10-year timeframes. In the immediately preceding fiscal year, the fund earned 7.97%. The return fell short of the fund’s target rate of 8.64%, however.

The private equity asset class delivered a stellar gain of 19.18%.

PE tops returns at pensions

A survey by the American Investment Council of 165 pension funds found that private equity outperformed other asset classes by a wide margin, and topped the returns table for seven consecutive years. Annualized returns on private equity over ten years to 2018 came in at 10.2%. Meanwhile, those on equities returned only 8.5%.

“Private equity investments allow pension funds to earn healthy returns and invest in growing companies not available on public markets,” commented AIC Director of Research Jamal Hagler. “For these reasons, pensions across America will continue to turn to private equity to ensure that they can meet their financial obligations.”

At the Iowa Public Employees’ Retirement System (IPERS), private equity as an asset class is 11% of the portfolio, with 40% in equities and 27% in core-plus fixed income.

As at the end of the fiscal year, the fund had $ 33.96 billion in assets.

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