Key Takeaways
- • Private equity delivered a median annualized return of 13.2% over 10 years across 200 U.S. public pension funds, the best-performing asset class versus public equity, real estate, and fixed income, according to the American Investment Council's 2026 Pension Trends Report.
- • Private equity has been the highest-returning asset class in public pension portfolios every year since 2012, per the AIC study.
- • Nearly 9 in 10 (86%) public pension funds studied invest a portion of their portfolios in private equity, covering roughly 34 million public-sector workers and retirees.
- • The Vermont Pension Investment Commission posted the highest 10-year average private equity return in the study at 16.61%, followed by the Ohio School Employees Retirement System at 16.27% and MassPRIM at 16.18%.
- • Per Preqin data cited in the report, 88% of surveyed institutional investors plan to increase or maintain private market allocations over the next year.
Summary
Private equity remains the best-performing asset class for America's public pension funds, according to the American Investment Council's (AIC) 2026 Pension Trends Report. Across the 200 pension funds studied, private equity investments produced a median annualized return of 13.2% over a 10-year period, outperforming public equity, real estate, and fixed income. The study covers pension systems serving nearly 34 million U.S. public-sector workers and retirees.
The AIC said private equity has been the highest-returning asset class in public pension portfolios every year since 2012, and that nearly nine in 10 public pensions studied invest in the asset class. AIC President and CEO Will Dunham framed the findings in terms of public servants' retirement security, stating that private equity "has consistently been the highest-performing asset class for public pension funds across the country."
Among individual funds, the Vermont Pension Investment Commission led with a 10-year average private equity return of 16.61%. Eric Henry, chief investment officer of the Vermont commission, credited his team and the commission's members for building the program. The Ohio School Employees Retirement System followed at 16.27%, with CIO Farouki Majeed describing private equity as the highest-returning asset class in its portfolio over 10 years and longer. The Massachusetts Pension Reserves Investment Trust (PRIM) returned 16.18%, and the West Virginia Investment Management Board posted 16.12%.
The Tennessee Consolidated Retirement System ranked fifth at 16.04%, and CIO Michael Brakebill said the program has helped the system maintain a funded status above 100%. The remaining top-10 entries were the City of Baltimore Employees' Retirement System (15.80%), Nebraska Investment Council (15.40%), Florida Retirement System (15.33%), the Public School and Education Employee Retirement Systems of Missouri (15.20%), and the Illinois State Board of Investment (15.20%).
The report also cites a Preqin survey finding that 88% of institutional investors plan to increase or maintain private market investments over the next year. The figures are the AIC's own study results and are presented from the industry trade group's perspective.
The AIC said private equity has been the highest-returning asset class in public pension portfolios every year since 2012, and that nearly nine in 10 public pensions studied invest in the asset class. AIC President and CEO Will Dunham framed the findings in terms of public servants' retirement security, stating that private equity "has consistently been the highest-performing asset class for public pension funds across the country."
Among individual funds, the Vermont Pension Investment Commission led with a 10-year average private equity return of 16.61%. Eric Henry, chief investment officer of the Vermont commission, credited his team and the commission's members for building the program. The Ohio School Employees Retirement System followed at 16.27%, with CIO Farouki Majeed describing private equity as the highest-returning asset class in its portfolio over 10 years and longer. The Massachusetts Pension Reserves Investment Trust (PRIM) returned 16.18%, and the West Virginia Investment Management Board posted 16.12%.
The Tennessee Consolidated Retirement System ranked fifth at 16.04%, and CIO Michael Brakebill said the program has helped the system maintain a funded status above 100%. The remaining top-10 entries were the City of Baltimore Employees' Retirement System (15.80%), Nebraska Investment Council (15.40%), Florida Retirement System (15.33%), the Public School and Education Employee Retirement Systems of Missouri (15.20%), and the Illinois State Board of Investment (15.20%).
The report also cites a Preqin survey finding that 88% of institutional investors plan to increase or maintain private market investments over the next year. The figures are the AIC's own study results and are presented from the industry trade group's perspective.
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