Episcopal Church Pension Fund’s Asset Value Rises to $17.5B in 2023

The investment portfolio of the Church Pension Group, the pension fund for the Episcopal Church, grew to $17.5 billion during the fiscal year that ended March 31, up from $17 billion one year earlier. The fund also reported that its investment portfolio has generated an annualized return of 7.6% over the past 10 years, exceeding its investment goal of 7.3% and its benchmark’s return of 6.3% over the same period.

“In 2023, CPG exceeded all benchmarks and targets for customer service, investment performance, and financial management—its key performance indicators,” the pension fund’s board of trustees wrote in its annual report. “The organization also recruited an extremely talented new chief investment officer and filled two key management-level roles in Church Relations and Client Engagement.”

Michael Hood joined the CPG as CIO in July 2023.

The pension fund board attributed the $500 million increase in asset value to publicly traded stocks, which, according to a statement, “delivered strong increases over the past year.” It also noted that although bond markets had a roller coaster year, they provided the portfolio with “modest gains.” The fund’s private asset investments, such as real estate and private equity, continue to adapt to increased interest rates and registered “muted returns amid subdued market activity,” according to the board.

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As of the end of March, the asset allocation of the pension fund’s investment portfolio was 28.1% in fixed income, 21.4% in private equity, 17.4% in global equities, 13.2% in hedge funds, 9.9% in real estate, 5.7% in absolute return, 3.8% in private specialty strategies and 0.4% in cash. On a regional basis, the portfolio’s asset allocation is 70.5% invested in North America, 11.7% in Asia, 11.6% in Europe, 2.2% in the Middle East and Africa, 1.7% in Latin America and 2.3% in “other” geographies.

The CPG board also noted that its investment team is including socially responsible investment principles in its broader investment strategy with a “four-pronged investment strategy,” which includes evaluating how current and prospective investment managers reflect environmental, social and governance issues in their analysis; investing for positive social impact while producing “strong risk-adjusted returns” and engaging with companies on ESG issues; and “sharing access to the expertise of thought leaders in SRI.”

According to the board, it continued to work on diversity, equity and inclusion in 2023, adding that “an intentional focus on DEI is vital to the CPF Board’s effectiveness because our ability to make good decisions depends on our willingness to hear each other’s perspectives.”