Oregon Investment Council Releases Q3 Returns Ahead of Board Meeting
The Oregon Investment Council, investment manager for the Oregon Public Employee Retirement Fund, announced the fund’s quarterly results ahead of a Wednesday council meeting. The $91.5 billion portfolio returned 5.7% for the 12-month period ending September 30, underperforming the OPERF policy benchmark of 10.1%.
For the year’s third quarter, the Oregon fund returned negative 0.7%, slightly underperforming its benchmark, which returned negative 0.1% for the quarter, but slightly ahead of peers (median return of negative 1.3%). The fund attributed the loss to a challenging market environment for equities and fixed income, with the fund’s private equity performance lagging that of peers.
Public equity was the fund’s highest-performing asset class for the one-year period, returning 20.8%. Fixed income returned 2.4%, and private equity returned 5.1% (as compared with the Russell 3000 Index’s 22.5% gain), which the council’s report noted is the reason for relative underperformance, due to private equity’s higher allocation in the portfolio.
The fund has returned an annualized 9.2% and 7.3% over the past three and five years, respectively, exceeding benchmark returns of 6.8% and 6.9%, respectively.
The investment council is seeking to rebalance its portfolio, as multiple asset classes are currently outside of policy range. Public equity, private equity and fixed income comprise 19.7%, 28.6% and 17.7% of the OPERF portfolio, while the target allocations for the respective asset classes are 27.5%, 20.0% and 25.0%.
“Private equity remains well above target, while public equity and fixed income are underweight,” the report stated. The fund also allocates 14.7% of its investment portfolio to real estate, 9.7% to real assets, 5.3% to diversifying assets, 2.9% to opportunity and 1.3% in cash.
The investment council will discuss the fund’s investment results in detail at its December 6 board meeting.
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