Private equity tops public pension returns for 14th consecutive year, AIC finds

Private equity returned a median 13.2% a year over the decade ending June 30, 2025, according to the American Investment Council's 2026 Pension Trends Report, released this week. That made it the highest-returning asset class in public pension portfolios for the 14th consecutive year, the trade group said; public equities returned 10.58%, real estate 7.77% and fixed income 2.40%.

The study analyzed 200 U.S. public pension funds representing nearly 34 million public-sector workers and retirees, and found that 86% of them invest some portion of their portfolios in private equity.

The Vermont Pension Investment Commission posted the highest 10-year annualized private equity return among the funds studied, at 16.61%. It was followed by the School Employees Retirement System of Ohio at 16.27%, the Massachusetts Pension Reserves Investment Trust at 16.18%, the West Virginia Investment Management Board at 16.12% and the Tennessee Consolidated Retirement System at 16.04%.

Tennessee's chief investment officer ties its private equity program to the plan's funding level. "The attractive, long-term returns generated by the TCRS private equity program have contributed to a funded status exceeding 100%, helping to secure the financial future of more than 400,000 active and retired members," said Michael Brakebill, chief investment officer of the Nashville-based system.

Michael G. Trotsky, executive director and chief investment officer of Boston-based MassPRIM, said the 10-year result reflected disciplined portfolio management and that private equity "remains an essential part of a diversified portfolio."

At 13.2% a year, $1 billion compounds to about $3.46 billion after 10 years, while at 10.58% the same $1 billion reaches roughly $2.73 billion.