2011: DOWN YEAR FOR STATE PENSION FUND

JANUARY 25, 2012: Year 2011 was not a good year for the Commonwealth’s Pension Reserves Investment Trust (PRIT) Fund.

Data released at this month’s Pension Reserves Investment Management (PRIM) Board meeting show that the $47.4 billion fund barely creeped into the black with an earnings of 0.26 last year.

After strongly recovering from a disastrous Year 2008 when the Fund lost -29.50% of its value, followed by earnings of 17.06% in Year 2009 and 13.56% in Year 2010, the Fund was a victim of the worldwide market slump last year.

Global equities which consists of 45% of the Fund, both in domestic and international markets, was down by -6.93% last year. Real estate, which constitutes ten percent of the total fund actually performed well last year with a return of 11.36%. This is commercial real estate, which differs from the housing market.

Another stalwart sector of the PRIT Fund, private equities, ten percent of the total Fund, returned 16.79% last year. This is a fund, which is only open to mega-investors with a high level of expertise, has returned 10.06% to the PRIT Fund over the past 10 years. This is compared to global equities, which has returned 4.78% over the same period.

Seeks Private Equities Officer

The PRIM Board, which has been in the top 10% nationwide of state pension funds’ performance since its inception in 1984 is currently seeking a new in-house private equity senior investment officer. Private equity senior investment officer Wayne Smith and his assistant Michael Langdon have both recently left PRIM for higher-paying jobs in the private sector.

“The Board has interviewed a number of applicants but has been unable to fill the position with which it feels would be the right person,” said PRIM Board member Paul Shanley. (Mitt Romney not available) “The Board has now voted to allow Mike Trotsky (PRIM Executive Director) to hire a ‘head-hunter’ (professional search) to help us with a candidate for this very sensitive position. It’s very difficult for PRIM to complete against private sector salaries when filling this type of job.”

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