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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ILPA Proposes New Private Equity Reporting Guidelines

The Institutional Limited Partners Association updates its templates for reporting and performance.



The Institutional Limited Partners Association, a trade group for institutional investors who are limited partners in private investment funds,
released on Tuesday an update to its reporting template, a framework for how private equity firms report fees and other expenses to their LPs. This is the first update to the template since 2016.  

The ILPA also announced a new performance template, which seeks to standardize private equity firms’ return calculating methodologies. The association noted in a statement that the performance template is an industry first and that private equity firms should begin using both templates in the first quarter of 2026. 

Changes in the updated reporting template include, according to the ILPA: 

  • Breaking out internal chargebacks to identify expenses allocated or paid to general partners or related persons; 
  • Adding more granular external partnership expenses better aligned to general ledgers; and 
  • Creating a single, uniform level of detail for all GPs to provide with the reporting framework identified in governing documents and accounting standards. 

Some key features of the new performance template, which seeks standardization by creating a framework for capturing performance metrics and corresponding contributions and distributions, include: 

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  • Tables to capture cash flows and fund- and portfolio-level transaction type mapping for transparency into the calculation methodology for performance metrics; 
  • Standardized reporting for performance metrics, including internal rates of return, total value paid in and multiple on investment capital, with designated breakouts for reporting the relevant gross and net figures with and without the impact of fund-level subscription facilities; and  
  • Two versions available to support GPs’ varying approaches to fund-level performance calculation methodology: one based on itemized cash flows and one based on grossed-up cash flows. 

“The ILPA team is proud to have led this important effort to create the next evolution of ILPA reporting standards,” said ILPA CEO Jennifer Choi in a statement. “The industry input and engagement throughout this entire process has been incredible, and as a result, we’re confident that we’ve developed templates and guidance that will be widely adopted and usher in an era of even greater transparency, alignment and partnership.” 

The ILPA’s Quarterly Reporting Standards Initiative’s steering committee, which assisted in developing the standards, included representatives of the California Public Employees’ Retirement System, Caisse de dépôt et placement du Québec, Pennsylvania’s Public School Employees’ Retirement System, the State of Wisconsin Investment Board and the Teachers’ Retirement System of Texas.  

GPs represented on the steering committee included Cerberus Capital Management, Searchlight Capital Partners and Vista Equity Partners. Fund of funds firm Asia Alternatives was also represented on the steering committee, which also included fund administrators CSC and State Street.  

As more and more pension funds and other institutional investors increase their allocations to private equity and other private-market assets, allocators are seeking increased transparency into the fees they pay their managers. In May 2024, dozens of asset allocators signed a letter calling for the hedge fund industry to implement cash hurdles before charging incentive fees.  

“CalPERS is a leader in advancing disclosure-whether it is on fee structures, climate risks, or governance. We believe transparency is vital to ensure that investors are fulfilling their fiduciary duty on behalf of their members,” said a spokesperson for CalPERS, speaking on the importance of transparency. 

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Allocator Group Calls for Cash Hurdles in Hedge Fund Fees 

ILPA Pushing Fee Template Implementation 

Limited Partners Swell Ranks as PE Fee Battle Intensifies 

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