Private-equity returns in one of the Illinois’ big pension funds are the best in the nation – Crain’s Chicago Business

The return was more than a full percentage point above all but two other public systems, in West Virginia and Massachusetts, with ISBI now ranking best in the country for the third year in a row.

ISBI itself is not a pension fund but invests on behalf of some state pension funds, including the $57 billion Illinois State Employee Retirement System and much smaller systems covering lawmakers and judges.

Council CEO Drew Maloney said his group hasn’t analyzed ISBI’s techniques, but the board “obviously is putting money into areas that do well.”

The report quotes ISBI as saying the returns are “a result of the hard work of ISBI staff, strategic partners, and our innovative investment model which seeks to thoroughly control fees while achieving strong performance on behalf of our 167,000+ beneficiaries.”

Notably, only 7% of ISBI’s assets, roughly $1.9 billion, were In private equity a year ago, and many of those investments may have declined in value since, along with the stock market. That means that, despite the good private-equity performance, SERS, the biggest fund whose investments are handled by ISBI, still is way underwater. As of June 30, 2021, it reported having only 42% of the assets on hand needed to pay promised retirement benefits, with $33 billion in unfunded liability.

Also of note is that none of the units that scored in the top 10 in return on investment ranked in the top 10 in terms of dollar value of investment. Maloney said one possible explanation is that pension systems that invest more infrequently in private equity are more cautious than systems that do so more regularly.

Whatever the reason, at least Illinois pension systems lead in something besides red ink for a change.


via “Illinois Politics” – Google News

July 12, 2022 at 01:55PM

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s