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UPDATED: Public Funds: Is 15 Percent the Magic Benchmark for Recent Annual Returns?

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Janet Cowell

NC State Treasurer Janet Cowell

For American public funds whose fiscal year ends on June 30, it appears that 15% was the benchmark return to beat. The $90.1 billion North Carolina Retirement Systems returned 15.88% for the fiscal year ended June 30, 2014. The pension investor has a target rate of return of 7.25% and is headed by North Carolina State Treasurer Janet Cowell. In August, the pension organization received approval to hire 10 new investment staff that were added in a state budget bill signed by North Carolina Governor Pat McCrory.

In a press release, Cowell commented, “The North Carolina pension fund is strong and well-positioned for the long-term. Our strategic, incremental diversification efforts are showing results.”

Looking to the golden state of California at the Sacramento pension giants, the California Public Employees’ Retirement System (CalPERS) returned 18.42% and CalSTRS posted 18.66%.

North Carolina Retirement Systems – Recent Performance

Asset Class FY Returns Current Allocation
Equities 24.66% 46.90%
Private Equity 18.27% 4.8%*
Credit Strategies 12.90% 5.30%
Real Estate 12.03% 8.40%
Inflation-Protection 8.21% 3.40%
Fixed Income 6.04% 30.40%

Source: North Carolina Retirement Systems

The $14.1 billion Oklahoma Teachers’ Retirement System returned 22% net of fees for the fiscal year. The top asset class was master limited partnerships earning about 42%, followed by U.S. equities at 27.6%.

U.S. Public Fund Annual FY Returns (Sample)

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Grant & Eisenhofer Reveals Fortis Investors to Receive $1.5 Billion in Mega Settlement

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Law firm Grant & Eisenhofer won a landmark case for its clients after a seven-year legal duel in Dutch courts. On July 13, 2018, the Amsterdam Court of Appeals officially approved the largest securities settlement ever reached in Europe, paving a path for international insurance company Ageas N.V./S.A. to begin payment of US$ 1.5 billion (€1.3 billion) to multiple groups of institutional and individual investors from Europe and the United States. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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State Street to Buy Charles River Systems

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State Street Corporation inked a deal to acquire Charles River Systems, Inc. (Charles River Development), a provider of investment management front office tools and solutions. Under the terms of the agreement, State Street will purchase Burlington, Massachusetts-based Charles River Development in an all-cash transaction for US$ 2.6 billion. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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FINMA Announces Rothschild Bank Broke Anti-Money Laundering Rules over 1MDB Fiasco

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The Rothschild Bank AG and one of its units called Rothschild Trust (Schweiz) AG got slapped with serious violations of anti-money laundering in regard to the 1MDB scandal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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