2010 Kind to Institutional Investors

January 27, 2011 (PLANSPONSOR.com) – U.S. institutional investment plan sponsors had strong investment performance for the second year in a row in 2010, gaining nearly 14% at the median, according to the Northern Trust Universe latest data.

A news release said Corporate Pension Plans had the strongest performance of three segments, advancing 13.9% at the median, while the median Public Fund was up 13.6% and the median plan in the Foundations & Endowments segment gained 12% for the 12 months ending December 31, 2010. In the fourth quarter, Public Funds led with median returns of 6.2%, Corporate Pensions gained 5.8%, and Foundations & Endowments advanced 5.6% at the median.

“A strong second half propelled institutional plan sponsors in 2010, as plan returns were slightly negative at mid-year,” said William Frieske, senior performance consultant, Northern Trust Investment Risk & Analytical Services, in the news release. “The performance of U.S. equities was a positive factor, and active management seemed to pay off in 2010. The median U.S. Equity Program in our Universe gained 18.4%, almost 150 basis points ahead of the Russell 3000 Index return for 2010.”

Private Equity and Hedge Funds appeared to have solid performance in 2010. The one-year return for Hedge Funds was 9.2% at the median while the median Private Equity program was up 13.7% for the 12 months ending December 31.

The Northern Trust Universe represents the performance of about 300 large institutional investment plans, with a combined asset value of approximately $650 billion, which subscribe to Northern Trust performance measurement services.