At a glance
- The study analyzed 200 U.S. public pension funds representing nearly 34 million public-sector workers and retirees, and found that 86% of them invest some portion of their portfolios in private equity.
- The Vermont Pension Investment Commission posted the highest 10-year annualized private equity return among the funds studied, at 16.61%.
- Tennessee's chief investment officer ties its private equity program to the plan's funding level.
Private equity returned a median 13.2% a year over the decade ending June 30, 2025, according to the American Investment Council's 2026 Pension Trends Report, released this week. That made it the highest-returning asset class in public pension portfolios for the 14th consecutive year, the trade group said; public equities returned 10.58%, real estate 7.77% and fixed income 2.40%.
The study analyzed 200 U.S. public pension funds representing nearly 34 million public-sector workers and retirees, and found that 86% of them invest some portion of their portfolios in private equity.
Private equity topped every asset class over the decade to June 2025
Median annualized return, 10 years ending June 30, 2025
Show as table
| Label | Value (%) |
|---|---|
| Private equity | 13.2% |
| Public equities | 10.58% |
| Real estate | 7.77% |
| Fixed income | 2.4% |
Vermont tops the fund-level ranking
The Vermont Pension Investment Commission posted the highest 10-year annualized private equity return among the funds studied, at 16.61%. It was followed by the School Employees Retirement System of Ohio at 16.27%, the Massachusetts Pension Reserves Investment Trust at 16.18%, the West Virginia Investment Management Board at 16.12% and the Tennessee Consolidated Retirement System at 16.04%.
Tennessee's chief investment officer ties its private equity program to the plan's funding level. "The attractive, long-term returns generated by the TCRS private equity program have contributed to a funded status exceeding 100%, helping to secure the financial future of more than 400,000 active and retired members," said Michael Brakebill, chief investment officer of the Nashville-based system.
Michael G. Trotsky, executive director and chief investment officer of Boston-based MassPRIM, said the 10-year result reflected disciplined portfolio management and that private equity "remains an essential part of a diversified portfolio."
At 13.2% a year, $1 billion compounds to about $3.46 billion after 10 years, while at 10.58% the same $1 billion reaches roughly $2.73 billion.
Reported by the Investments desk from InvestmentNews — Retirement. Published . Corrections