Private equity returns 32% for Virginia Retirement

Private equity generated the highest return of VRS’ assets, outperforming the overall fund by 11.6 percentage points.

The Virginia Retirement System’s $3.6 billion (€2.6 billion) private equity portfolio netted a 32 percent return for the fiscal year 2007, up from 28.6 percent the previous year.

As of 30 June, private equity was the top performing asset class for the $58 billion pension fund, whose overall investment portfolio generated a 20.4 percent return, surpassing VRS’ previous benchmark of 18.4 percent.

VRS’ portfolio also incudes $37.6 billion in public equity, which returned 24.5 percent; $11.2 billion in fixed income, which returned 6 percent; $2.9 billion in real estate; which returned 23.8 percent; and $2.1 billion in credit strategies, which returned.13.6 percent.

The pension plan’s chief investment officer, Charles Grant, said in a statement he expected returns to be more moderate in the future, “as represented in the fund’s long-term investment return assumption of 7.5 percent”.

A spokeswomen for the pension plan told PEO the prediction was based on VRS’ analysis of market conditions, but did not elaborate further.

In 2006, the pension fund said its top 10 private equity managers were: Welsh, Carson, Anderson and Stowe, Madison Dearborn Partners, Summit Partners, First Reserve, Charterhouse, Hellman and Friedman, TA Associates, Nordic Capital, Joseph Littlejohn, and Levy and New Enterprise Associates.