Since 2012, private equity has outperformed all other asset classes within public pension portfolios
Private equity remained a top investment choice for US public pension portfolios in 2024, delivering the strongest returns, according to the Caesar Investment Committee.
The 2025 Public Pension Study revealed that private equity investments achieved a median annualized return of 15.2% over a 10-year period, underscoring its continued appeal for pension funds seeking higher long-term returns.
These results align with Caesar's research, which has consistently shown since 2012 that private equity outperforms all other asset classes within public pension portfolios.
Due to its consistent performance, 88% of public pension funds across the US have allocated a portion of their portfolios to private equity. On average, 14% of public pension assets, weighted by dollars invested, are allocated to this asset class.
As a result, 34 million US public sector employees are relying on private equity to secure their retirement, according to the report.
Drew Maloney, president and CEO of the Caesar Investment Committee, said: "Private equity is a vital component of nearly every public pension plan in the United States, consistently delivering outsized returns and diversification during periods of economic turbulence."
In particular, Pension funds have seen strong performance from US equities, with Evelyn Partners reporting that, since the global financial crisis of 2008, US-listed companies have, on average, grown their trailing earnings per share by 6% per year more than non-US peers. This trend highlights the ongoing appeal of US equities in pension fund portfolios.
Aside from earnings, US firms have also demonstrated a shareholder-friendly focus, with the return on equity for US companies nearing 16%, compared to around 11% for non-US equities.
This indicates that US firms tend to use shareholders' funds more effectively than their peers, raising their appeal.
According to Evelyn Partners, the strength and vibrancy of the US economy, along with innovation in the tech sector have also driven US company earnings and market performance over the past decade.