City retirement system named top performer in country

San Diego city money
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SAN DIEGO — The online publication Reuters PE Hub Thursday named the San Diego City Employees’ Retirement System as the best public pension plan in the country when it comes to the performance of its private equity portfolio.

The results follow a survey in July of more than 160 public pension funds nationwide.

“The success of SDCERS’ private equity program can be attributed to the thoughtful way in which the program was constructed, and the quality of the dialogue between staff and consultants,” SDCERS CEO Mark Hovey said. “I am proud of our investments team and the Board of Administration, who work tirelessly to secure a retirement future for more than 200,000 members through an effective investment strategy focused on delivering long-term results.”

SDCERS’ private equity portfolio consists of 45 different funds, with commitments of $580 million. The survey noted 47 percent of SDCERS’ funds performed in the top 25 percent of all funds surveyed. The private equity program invests in all types of assets and strategies globally, including buyouts, special situations and venture capital funds.

“The independent acknowledgement that SDCERS is performing exceptionally well demonstrates the great improvements made over the past decade,” said San Diego City Council President Todd Gloria. “I commend SDCERS board members and staff for their ongoing focus on responsible investing.”

Critics say city’s pension system was seriously underfunded in the 1990s and 2000s. In 2005, analysts estimated that the system had a deficit of up to $2 billion. Voters passed Proposition B to prevent the deficit from getting worse, but some critics, notably former City Attorney Michael Aguirre, say the system is still underfunded.

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