El Paso employees trust reports $1.036 billion in assets; trustees hear private-equity, allocation concerns

The City of El Paso Employees Retirement Trust on Aug. 20 received its monthly treasury and investment-performance reports showing net assets available for benefits of approximately $1,036,000,000 as of July 31, 2025.

Louis Meyer of the City of El Paso Comptroller's Office presented the treasury statements, saying total cash and investments were "approximately 1,031,000,000" and that receivables and liabilities were roughly $3,200,000 and $473,000 respectively. Meyer said net investment income for the 11 months was about $69,000,000 and total additions for the period were approximately $127,000,000. Benefits paid to retirees for the 11 months totaled about $76,000,000.

The trust's investment consultant from Kellum LLC, Alex Browning, gave the investment overview and economic context. Browning said the trust's fiscal-year-to-date return was near the board's annual target and cautioned that "it's going to be pretty tight to get to that 7.25%" target by the fiscal year end, noting July flash estimates and the limited private-equity write-ups given lower transaction volumes.

Browning described recent asset class performance: strong U.S. large-cap returns, international equities outperforming U.S. equities year-to-date (helped by a declining dollar), modest real-estate returns and fixed income providing an anchor with multi-year outperformance versus benchmark by a few dozen basis points. He noted the trust's total-fund fiscal-year-to-date return on a gross basis was roughly 7.71% with proxying of private-equity and real-estate to public indices for the flash report.

Trustees and staff focused discussion on private equity. Browning and board members said private equity remains illiquid and the plan is currently overweight private-equity relative to the Investment Policy Statement (IPS) top bound of 16%, while domestic fixed income sits below its target lower bound (21%). Browning said the overweight position is being managed through normal cash flows and rebalancing as realizations occur.

Robert Ash, the trust's executive director, and trustees requested follow-up work: Callan will be asked to review peer benchmarking for the trust's performance and the investment committee will examine manager-level performance and the private-equity pacing/commitment analysis. Trustees noted long-term private-equity outperformance but raised concerns about deal supply and rising retail (401(k)) demand into private markets altering pricing dynamics.

The board was also told that the quarterly report (with final figures rather than index proxies) will provide more definitive returns and that staff aims to manage cash flows to rebalance toward target fixed-income weight. No formal allocation changes were taken at the meeting; trustees directed the investment committee and staff to investigate options and report back.

The discussion also covered market risks and near-term drivers, including Federal Reserve actions, and the potential impact of any large rate cuts on private-market returns and real-estate valuations.

The trust's investment consultant listed recent manager activity and operational items that will appear in forthcoming materials to the board, including an international-equity search following termination of Lazard, the addition of TA Realty to real-estate allocations (funded April 1), and a watch placed on AllianceBernstein for small- and mid-cap U.S. equities.