Private Equity Drives Wisconsin Pension Plan

Jan 9 2007 | 10:45am ET

For the third straight year, State of Wisconsin Investment Board’s Core Retirement Fund posted healthy double-digit returns, buoyed by its private equity investments.

For the year ending Dec. 31, the Core Retirement Fund returned an estimated 15.6%. The Core Fund (formerly known as the Fixed Fund) is the larger of the two trust funds of the Wisconsin Retirement System and has diversified holdings in domestic and international stocks, bonds, loans, real estate and private equity. The preliminary market value of the Fund on Dec. 31 was $76.0 billion.

SWIB's private equity portfolios had a strong year with returns of 25.5%, as money flowing into global private equity created excellent selling opportunities for SWIB holdings, particularly in Europe, according to the system. Energy and telecommunications investments had strong performances.

“Once again, SWIB’s private markets group provided strong performances in both private equity and real estate,” said David Villa, chief investment officer. Real estate investment trust portfolios earned 36.2% and private real estate investments gained 28.8%. Investments in real estate operating companies and overseas investments, particularly in Germany and Japan, performed well.

Year to date, the system’s Variable Fund, an all-stock fund, also posted strong returns of 17.6% on the strength of the domestic and international stock markets.

The Core and Variable Funds comprise the WRS Trust Funds, which provide benefits to over 533,000 current or former employees of state and local governments. The WRS is the ninth largest U.S. public pension fund and the 24th  largest public or private pension fund in the world, according to the system.


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