What Are Public Pensions Investing In?

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Oct. 23 (Bloomberg) -- Private Equity Growth Capital Council CEO Steve Judge discusses investing in private equity with Deirdre Bolton on Bloomberg Television's "Money Moves." (Source: Bloomberg)

You are collecting it so you know more or less where the benchmarks will finish.

Were you surprised?

Great to see you again.

Thanks for having me back.

We were not surprised.

We thought this would show private equity is the best performing asset class.

Let's look at some of the numbers.

I have a list and i actually pulled it from your report.

The top pension funds, by pe returned.

The pensions that are actually investing the most in pe.

I'm going to go down the list, massachusetts, l a county, texas, minnesota.

What are they doing right?

A lot of people invest in pe, not everybody is getting these results.

What we're finding is these are great returns.

We looked at the average results as well.

Across the country you are finding that private equity provides a 10% annual return over 10 years.

That is phenomenal.

That is compared to any other asset class.

With these managers are doing, they are very smart managers who are going to the best funds and to the best firms and getting extraordinary returns.

That is what makes them different third what about the ones that the size-wives have more to invest?

I'm thinking of calpers.

They had great returns as well.

I think calpers had close to 10% over 10 years in the second largest had owns 13%. both are phenomenal returns.

We are looking at the top 10 out of 146 funds.

Ease are the star performers.

They are knocking the ball out of the park.

You're still looking at extremely good returns.

What is the overall lesson if you can't invest with the best of class firm, that is to say a best of class pe firm?

It says even the medium return, even the median return of private equity, and you're still getting a 10% return on your investment.

So if you put in one dollar, you're getting two dollars 60 cents back.

That beats every other asset class.

If you look at the other classes, we are 2.5 point at her than they are.

So i think it speaks to the important -- better than they are.

So i think it speaks to the importance of retirement for americans.

We have that date on our screen so viewers can follow it as well.

One dollar over 10 years, we have it compared to stocks, bonds, and then real estate as well.


It really does pay to the importance of the asset class.

And how important it is for teachers, firefighters, and policeman and also how important it is to community so they know their plan is going to be adequately funded.

As far as some of the criticisms, why aren't these pensions better funded?

It has become a national story in many communities the 8.5% target is too hard to hit.

It is very difficult in the last five years.

You have at other classes that did not perform as well.

The recession has been really tough for pension managers to make those numbers.

There has been some bright lights, private equity is one of them.

I think it is going to be difficult for pension funds to make a number.

But we have seen some of the plants are doing an excellent job in managing their money and making their investments.

One less question, do you think for the biggest asset manager, lack some, the fact they are making more money from real estate investments -- blackstone, the fact they are making more world -- more money from real estate investments, do you think that is some sort of message for the industry overall?

I do not think so.

I think firms like blackstone have taken a different approach.

They are doing what good investors do.

They are investing in a bunch of classes.

Lacks down -- lacks don't is still known -- blackstone is still known.

They continue to be the best asset class for pension funds and i think for other institutional investors.

Steve, thank you for the time and your research.

Steve judge, president and ceo

This text has been automatically generated. It may not be 100% accurate.


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