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Mass. pension sees 13.4 percent return

Massachusetts’ public pension fund chalked up a 13.4 percent return for the last fiscal year, putting it among the best performing pensions in the country.

The Pension Reserves Investment Trust, Massachusetts’ $36 billion (€29 billion) state pension fund, has posted a 13.4 percent return for the fiscal year ending 30 June, with some of the credit going to strong alternative assets and real estate performance. The pension has an annual return target of at least 8.25 percent.

According to press reports, alternatives racked up a 26.3 percent return, while real estate earned a 30.8 percent gain. Emerging markets equities returned 37.4 percent.

For the fiscal year ending 30 June, 2004, the pension had a 5.7 percent allocation to alternatives and saw a 25 percent return.

In the past, the pension has invested with a number of high-profile LBO and venture capital firms, including Madison Dearborn, Kravis, Kohlberg & Roberts, Harbourvest Partners, Permira, CVC Capital, Battery Ventures, The Blackstone Group, Boston Ventures and Apollo Management.

The fund pays benefits to around 275,000 public workers in the Bay State. Treasurer Timothy Cahill, who oversees the pension, has reallocated the trust’s assets during his tenure and suggested that diversity helped the fund’s performance.

“Being in the right asset classes – obviously with a tilt towards international markets, which have been extremely strong – helped,” Cahill told The Boston Globe.