Pensions Cut Private Equity Exposure as Returns Trail Stocks

Oregon and Washington State’s pension funds — the first among their cohort to invest in private equity nearly a half-century ago — are pulling back as the industry underperforms the broader public markets and struggles to return cash to investors.

The asset class accounts for 25% of the Oregon Public Employees Retirement System’s portfolio, down from 27% in 2024, and it’s poised to drop closer to its 20% target. The Washington State Investment Board’s $185 billion Commingled Trust Fund, which allocated 28.1% of its portfolio to private equity at the end of September, recently lowered its target to 23% from 25%.