Arizona PSPRS generates $660m, reports 7.8% gross return for FY2018
The Arizona’s Public Safety Personnel Retirement System has netted investment returns of nearly $660 million over the past fiscal year, with the help of strong performance by the trust’s public and private equity assets.
The fund’s investments also generated a gross return rate of 7.8 percent for the year, helping the system top the $10 billion mark in assets under management for the first time in its 50-year history. Net of fees, the overall returns stood at 7.1 percent for fiscal year 2018.
“Our investment team has made enormous strides in building a portfolio capable of producing solid returns while we take less risk than the vast majority of our peer funds,” said PSPRS board chairman, Brian Tobin. “It can be hard to show the value of a low-risk approach in a bull market, but we have to keep perspective if we want to avoid the same mistakes that led to significant losses in the past. This strategy protects our members, Arizona employers and millions of taxpayers while the system continues to recover.”
PSPRS investment returns in asset classes including private equity, fixed income, private credit, global trading strategies, real assets and risk parity continue to meet or outperform long-term benchmarks, while overall returns were hampered by pre-recession joint venture real estate investments.
“Our portfolio is built around the fact that we need to invest responsibly because losses over the course of even a single year could prove disastrous for some employers and potentially harm our ability to meet our obligations to retirees,” said Mark Steed, who was recently selected as PSPRS’ new CIO. “This requires a balanced strategy across multiple asset classes and far less reliance on the stocks and bonds that make up the typical investment portfolio.”
PSPRS investments generated just under $3 billion of investment returns over the past five years. Retirement plans managed by PSPRS typically distribute about $1 billion of retiree, survivor and disability benefits each year.
