Colorado PERA PE portfolio underperforms

  • $3.5 bln portfolio falls short of benchmarks
  • Colorado PERA launched PE program in 1982
  • $41.8 bln system backed early Blackstone, Warburg funds

Colorado Public Employees’ Retirement Association’s private equity portfolio underperformed last year, netting 5.6 percent against its custom benchmark return of 6 percent, according to its annual report.

“The private equity and opportunity fund asset classes were slight detractors to overall performance,” according to the report.

The retirement system’s $3.5 billion private equity portfolio undershot its long-term performance benchmarks as well, netting 9.5 percent on a 10-year annualized basis, more than a full percentage point short of its custom benchmark. Its annualized performance on a three-year and five-year basis also came up short of benchmarks.

Even so, the PE portfolio delivered $151 million in net cash distributions to the retirement association last year.

Colorado PERA held 8.2 percent of its assets in private equity as of year-end, less than half a percentage point below its long-term target allocation to the asset class.

The $41.8 billion association’s PE portfolio includes its holdings in venture capital, distressed debt and secondary funds, as well as traditional buyout funds.

Colorado PERA has been an active investor in private equity since the early 1980s. The retirement system was an early investor in buyout funds raised by firms like Apollo Global ManagementBlackstone Group and Warburg Pincus.

The retirement system committed $785 million to PE in 2014 vintage funds, according to its most up-to-date list of fund holdings. Information about its portfolio of 2015 funds wasn’t immediately available.

Colorado PERA Director of Private Equity Tim Moore could not be reached for comment.

Action Item: Colorado PERA’s annual report: