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 Equity121
Real Assets76
Private Debt47
Equity31
Fixed Income19
Hedge Fund16
Multi Asset7
Hedge Fund – Fund of Funds3
Private Equity – Fund of Funds1
3Q 2017 Public Pension Plan Investment Commitments
Private Equity124
Real Assets91
Private Debt50
Equity42
Hedge Fund21
Fixed Income17
Multi Asset14
Private Equity – Fund of Funds3
Real Assets – Fund of Funds1
Hedge Fund – Fund of Funds1
2Q 2017 Public Pension Plan Investment Commitments
Real Assets99
Private Equity92
Private Debt40
Equity37
Hedge Fund17
Fixed Income13
Multi Asset13
Private Equity – Fund of Funds3
1Q 2017 Public Pension Plan Investment Commitments
Private Equity87
Real Assets74
Equity35
Private Debt31
Fixed Income15
Hedge Fund13
Private Equity – Fund of Funds6
Multi Asset6
Hedge Fund – Fund of Funds2
Real Assets – Fund of Funds1

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