Connecticut State Treasurer Denise L. Nappier said in a news release that the pension funds’ net market value increased by $1.5 billion, with $2.6 billion from investment returns offset by $1.1 billion in net benefit payments, to end the fiscal year at $21.9 billion.
“The one year investment return is a welcome recovery from the difficult market environment of the last several years and our pension funds’ related performance setbacks,” said Nappier, principal fiduciary of the funds, in the news release. “While we still have a ways to go, it takes the sting out of the dismal returns of fiscal year 2009 and demonstrates the resiliency of our pension fund investment program.”
The State Employees’ Retirement Fund (SERF), the Teachers’ Retirement Fund (TRF), and the Municipal Employees’ Retirement Fund (MERF) – comprising the majority of the CRPTF – outperformed their customized benchmark by .33%, .58%, and .75%, respectively, while returning 12.93%, 12.87%, and 12.57%, respectively, Nappier said.
With above-average levels of cash, the CRPTF entered the year well-positioned to take advantage of the rally in equity and credit markets. The treasurer said the pension funds, saw “particularly robust” returns from emerging market equities, high yield bonds, emerging market debt, and private equity, with returns of 25.30%, 24.63%, 23.05%, and 17.32%, respectively.
While most of the asset classes in the CRPTF had double-digit returns, the notable exception was commercial real estate, where high levels of unemployment and a subdued recovery in consumer spending impaired valuations, according to the announcement.