Consultant Callan delivered an extended education session to the City of El Paso Employees Retirement Trust explaining how private equity funds operate, why pacing matters and how the trust’s private‑equity program should be managed over the coming decade.

Chrissy Maynard of Callan outlined private equity’s structure (GP/LP limited partnerships), the typical capital call and distribution timeline, and the J‑curve effect that often produces negative returns early in a fund’s life. She described benchmarking challenges for private markets and said the trust’s move to a Cambridge private‑equity benchmark would provide more appropriate peer comparisons than a public‑market index such as the Russell 3000.

Callan presented the trust’s current private‑equity position: 10 commitments totaling $330 million in committed capital, recent new commitments (Adam Street global 2025 commitment of $40 million with no amounts called yet), and an overall private‑equity allocation reported at 16.9%. The consultant recommended a pacing plan to reduce and then maintain the allocation at 13%, proposing $90 million commitments in 2028 and 2031 and a $110 million commitment every three years beginning in 2034, allocated 50/50 between primary fund‑of‑funds and secondaries at the outset (Callan projects NAV to be roughly two‑thirds primaries over time).

Callan also explained assumptions used in the pacing model: updated 2Q private equity values from manager statements, Cambridge cash‑flow profiles, an assumed private‑equity return of 8.5% and a plan total projected return of about 7.36% based on Gallagher actuarial cash‑flow inputs. Trustees asked questions about measurement (public market equivalent, PME), manager selection, secondary market discounts (Callan said secondary buyers are offering 30–50% discounts in some venture secondary transactions), and how venture and buyout strategies differ in timing and exit pathways.

The session was presented as continuing education required by the Texas Pension Review Board; Callan requested trustees complete a training credit survey. No board action was required for the education presentation, but trustees received the pacing recommendations that staff and committee will consider in future commitment decisions.

Callan emphasized that pacing and manager selection are the main levers to control vintage‑year concentration, cash‑flow timing and long‑term outcomes for private‑equity programs.