“The portfolio was able to exceed the assumed rate of return based on strong performance in several market sectors, especially private assets,” CIO Ronald Schmitz said in a release. “Longer-term performance generated by staff and its external partners continue to add value compared to passive benchmarks. Over time, this excess performance reduces the cost of providing benefits to public employees.”
The three-, five-, 10-, and 20-year annualized returns for the fund are 7.1%, 8.3%, 6.1%, and 6.5%, respectively.Private equity was by far the VRS’s top-performing asset class, returning 15.8%, followed by public equity and real assets, which earned 9.7% and 9.5%, respectively. The strategic opportunities asset class returned 7.0%, while credit strategies returned 5.2%. Fixed income was the only asset class not to contribute positive returns to the fund, losing 0.1% for the year.
The portfolio included approximately $31.4 billion in public equity, $12.4 billion in credit strategies, $12.1 billion in fixed income, $10.6 billion in real assets, $7.9 billion in private equity, and $1.9 billion in strategic opportunities.
As of the end of June, the fund’s asset allocation was 41% in public equities, 16.2% in fixed income, 16.1% in credit strategies, 13.5% in real assets, 10% in private equity, 2.4% in strategic opportunities, and 0.8% in cash.
According to the VRS, the system is the 20th-largest public or private pension fund in the US, and the 44th-largest in the world, and has approximately 705,000 active and inactive members, retirees, and beneficiaries. VRS paid out approximately $4.6 billion in benefits to more than 206,000 retirees and beneficiaries in fiscal year 2018.
Tags: Fiscal Returns, Pension, Private Equity, Virginia Retirement System