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

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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