Private Equity No. 1 Choice for U.S. Public Pensions in 4Q

Private Equity No. 1 Choice for U.S. Public Pensions in 4Q
January 25, 2018

U.S. public pension plans announced 121 new commitments to private equity in the fourth quarter, according to the latest data from eVestment, the global leader in institutional investment data and analytics. This is down from the 124 private equity commitments U.S. public pensions announced in Q3, but still enough for private equity to be by far the No. 1 asset class these plans committed to in Q4.

Real assets came in at No. 2, with 76 new commitments in Q4, followed by private debt at No. 3 with 47 commitments. Private equity was also the No. 1 choice for new U.S. public pension plans commitments tracked by eVestment in Q3 and Q1 2017 (the first quarter eVestment began tracking this data). In 2Q 2017, real assets were the No. 1 asset class for new public pension plan commitments (full charts below).

“It’s been interesting to watch the growing appetite public pension plans have for private equity investments in 2017, and to see the spread widen between private equity and other asset classes as much as it did in Q4,” said Graeme Faulds, eVestment’s Director of Private Markets solutions.

“Public pension plans have large pools of investable assets,” he continued. “And, because of their public nature, they also have higher disclosure and fiduciary responsibilities to their stakeholders than many private equity and private markets investors. Investment managers hoping to win these commitments have to be willing to accept this greater transparency and it appears an increasing number of them are.”

The public pension investment commitment data is mined from eVestment’s Public Plan IQ solution, which aggregates data, documents, videos and more from hundreds of U.S. state and local government pension plans. For more information about Public Plan IQ, please visit https://www.evestment.com/products/public-plan-iq/.

4Q 2017 Public Pension Plan Investment Commitments
Private Equity 121
Real Assets 76
Private Debt 47
Equity 31
Fixed Income 19
Hedge Fund 16
Multi Asset 7
Hedge Fund – Fund of Funds 3
Private Equity – Fund of Funds 1
3Q 2017 Public Pension Plan Investment Commitments
Private Equity 124
Real Assets 91
Private Debt 50
Equity 42
Hedge Fund 21
Fixed Income 17
Multi Asset 14
Private Equity – Fund of Funds 3
Real Assets – Fund of Funds 1
Hedge Fund – Fund of Funds 1
2Q 2017 Public Pension Plan Investment Commitments
Real Assets 99
Private Equity 92
Private Debt 40
Equity 37
Hedge Fund 17
Fixed Income 13
Multi Asset 13
Private Equity – Fund of Funds 3
1Q 2017 Public Pension Plan Investment Commitments
Private Equity 87
Real Assets 74
Equity 35
Private Debt 31
Fixed Income 15
Hedge Fund 13
Private Equity – Fund of Funds 6
Multi Asset 6
Hedge Fund – Fund of Funds 2
Real Assets – Fund of Funds 1

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