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PSPRS private equity performance honored


Public Safety Personnel Retirement System 
State of Arizona
July 29, 2019

Contact: Christian Palmer
Phone: 602-296-3736

PSPRS private equity performance honored 
Industry group: “Remarkable achievement,” as PSPRS ranks fifth of 165 pensions

Arizona – The private equity investments of the Public Safety Personnel Retirement System generated elite performance according to a national industry trade group that studied 165 American public pension plans.

Investments in private equity, which consists of the buying, improving and selling of private assets, such as businesses, by PSPRS generated an 11.36 percent return over the 10-year period between fiscal years 2008 and 2018. The net-of-fee returns ranked PSPRS fifth overall out of 165 pension plans with more than $1 billion in assets, according to the American Investment Council.

“A fifth place rank out 165 public pensions is a remarkable achievement for Arizona’s Public Safety Personnel Retirement System,” said Drew Maloney, AIC President and CEO. “Private equity investments have a proven track record of maximizing returns while providing stability that benefits the 60,000 first responders, corrections officers, elected officials and judges in PSPRS-managed plans.”

For the 10-year period ending June 30, 2018, PSPRS had approximately $1.5 billion of its $9.8 billion trust in private equity investments. Its 11.36 percent performance exceeded both AIC’s identified private equity median annualized return of 10.2 percent and the growth in public markets (stock market) generated during the current historic bull run.

The majority of private equity investments held by PSPRS are in funds selected by Chief Investment Officer Mark Steed and Lead Portfolio Manager Shan Chen.

Chen was recognized in late-2018 as among the nation’s Top 30 Public Pension Institutional Investors, along with PSPRS Portfolio Manager Bill Thatcher, by Trusted Insight Magazine, which noted that public pension plans were in the midst of a “raging war” for talented investors.

“The PSPRS investment team has done an outstanding job of building the foundation for steady, consistent growth that will ultimately put the system back on track,” said PSPRS Investment Committee Chairman Harry A. Papp, who is also the managing partner of the L. Roy Papp and Associates investment firm. “I look at their private equity accomplishment as an unmistakable sign of progress as we work together to deliver on our promises to members while lowering costs for employers.”

Since the end of the 2018 fiscal year, the PSPRS trust has grown to approximately $10.5 billion. The trust provides approximately $1 billion in retirement, disability and survivor benefits each year.

PSPRS engages in a risk-averse investment strategy to generate returns while protecting Arizona’s public safety employers and taxpayers from market volatility. Please see the PSPRS investment strategy video on YouTube to learn more.