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CIO reports year‑to‑date gains for Federated funds; private markets show early realizations
Summary
At the June meeting trustees heard that the pension fund was up roughly 8.8% year to date and the health care trust about 10.2%; private markets distributed roughly $12.5 million in Q4 and early 2025 showed additional realizations.
The board received quarterly investment updates on June 26, 2025, reporting strong year‑to‑date returns for the Federated retirement funds and early distributions from private markets investments.
The system’s chief investment officer told trustees the pension fund was up 8.79% fiscal‑year‑to‑date and the health care trust was up 10.18% (preliminary Meketa estimates), with two trading days remaining in the fiscal year. The CIO added: “I don't know if it'll keep us top decile, but, you know, I'm more interested in making sure that we beat the discount rate for sure.”
Private markets staff reported that distributions for the fund’s private equity/co‑investment program were stronger than the broader market in the quarter ending Dec. 31, 2024. Casey (private markets) said the program returned roughly $12.5 million in distributions in Q4 and had distributed nearly an additional $6 million post‑quarter. Series 1 private investments showed a net multiple near 1.9x and Series 2 at about 1.2x (early stage), staff said.
The private debt program represented about 3.7% of the fund at Dec. 31, 2024 (policy target 3%). Staff reported a since‑inception internal rate of return of roughly 6.5% for that program and noted three new private‑debt investments totalling about $7 million each in Q4. Private real assets and real estate commitments were also active: staff said two private real‑assets commitments (Pelican and Lime Rock) and a roughly $11 million real‑estate commitment were made during the quarter.
On total fund performance, staff reported a fund size of approximately $3.2 billion as of March 31, 2025, with a five‑year annualized return near 10.7% that ranked in the top quartile of a peer group. In the early part of 2025, non‑U.S. equities outpaced U.S. stocks and commodities and REITs provided diversification; staff noted that private‑markets valuations are lagged and will be updated as later private‑market reports become available.
Trustees asked for deeper education on private‑market valuation practices and TBPI/IRR calculations at a future investment committee meeting. Trustees also asked for a single‑page summary of secondaries exposure (LP interests vs. GP‑led continuation vehicles) to be circulated to the investment committee.
The board heard the investment reports as information; no board action was required.
