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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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PSP Investments and Blue Sky Alternative Investments End Strategic Partnership Agreement

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Blue Sky Alternative Investments Limited informed Canada’s Public Sector Pension Investment Board (PSP Investments) that it agreed to terminate its strategic agreement effective March 31, 2019. In December 2017, Blue Sky Alternative Investments forged an agreement with PSP Investments to assist in committing capital in a number of agricultural investments.

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Yield-Hungry Korean Insurance Capital Backs TSX Broadway

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Mirae Asset Daewoo Co., Ltd., the Seoul-based investment banking firm, has provided a US$ 375 million loan for a redevelopment in New York’s Times Square. It joins L & L Holding Company, Maefield Development, and Fortress Investment Group who are bringing the development known as TSX Broadway to life. The building is at 1568 Broadway in Manhattan. TSX Broadway, a US$ 2.5 billion project when all equity financing is added in, will allow for renovations and expansion of the 46-storey building. An LED screen, which is not an uncommon sight in the Big Apple, will wrap around the corner of the tower. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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OFFICIALS: Saudi Crown Prince Denies Interest in Acquiring Manchester United

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The Saudi Arabian government dispelled rumors that Saudi Crown Prince Mohammed bin Salman will acquire football club Manchester United. However, Saudi Arabia’s Public Investment Fund (PIF) had talks regarding sponsorship with the football club. Manchester United signed a partnership deal with Saudi Arabia’s General Sports Authority in 2017.

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