US Pension Plan Managers Split on Primary Benefit of Private Assets

An Ortec Finance survey sheds light on what pension fund executives expect in the coming years.



As an increasing share of pension funds increase their allocations to private markets, plan managers are split on the benefit these assets have in their portfolio. Most pension fund executives also expect distributions from private equity, which have been lower in recent years, will increase over the next three years.

According to a survey from Ortec Finance B.V., which interviewed pension fund executives in the U.S. about their expectations for the next three years, approximately 74% said they expect higher distributions from their private equity managers. Just 12% said they expect distributions to be lower, and 14% said they will be unchanged. Out of the 74% who anticipated higher distributions, 38% said they would be much higher, while 36% said they would be slightly higher.

The expectation of future distributions is shaping these pension managers’ pacing strategies, as they have to strategize how much to allocate into private assets like private equity and private credit. Approximately 90% of respondents said their views on distributions are impacting their pacing strategies. Of these respondents, 64% said their view of distributions will have a slight impact on their pacing strategy, while 26% say it will have a considerable impact.

Pension plan managers had a range of opinions on the primary benefit that private market assets bring to their portfolios. Approximately 40% said the returns and the illiquidity premium were the most important reasons for investing in private assets. Diversification was the most important reason cited by 34% of respondents, while 26% said inflation protection was most important.

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Most pension managers responding to the survey considered a private assets allocation between 20% and 40% as reasonable.


“We see with plans that navigating their private equity distributions and commitments is representative of the balancing act between liquidity and the varying pros of private asset classes,” said Richard Boyce, Ortec’s managing director for North America, in a statement. “The survey points towards a growing belief that distributions for private equity are expected to increase in the future, which is a positive expectation showing that plans are about to reap the benefits from illiquidity premium.”

Ortec Finance partnered with research firm PureProfile for the survey, in which 50 senior pension fund executives at public, corporate, endowment and multi-employer plans in the U.S. were interviewed. The total value of those funds’ assets under management was $670.4 billion in November 2024.

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