Virginia Retirement System Returns 6.1% in Fiscal 2023

The commonwealth’s pension fund asset value grew to $105 billion.

The Virginia Retirement System’s investment portfolio returned 6.1% net of fees for the fiscal year ending June 30, raising its asset value to approximately $105 billion from $101.2 billion one year earlier. The performance fell just shy of its benchmark’s return of 6.3% and the 6.75% assumed rate of return.

The pension fund reported a three-year return of 10.8%, a five-year return of 8.0% and a 10-year return of 8.2%. Those compare with its benchmark’s returns of 7.9%, 6.3% and 7.1%, respectively, over the same periods. Over the longer term, the VRS reported 15-year returns of 6.0%, 20-year returns of 7.7% and 25-year returns of 7.3%, although benchmark returns for those periods were not available.

Public equities was the top-performing asset class for the pension fund during fiscal 2023, returning 15.6%, but it missed its benchmark’s 16.7% return. It was followed by multi-asset public strategies, which returned 7.7% and beat its benchmark by 30 basis points. The VRS’ credit strategies program returned 5.7%, well off its benchmark’s 9.2% return, while private investment partnerships returned 1.9%, beating its benchmark’s 1.1% return.

Real assets returned 1.7%, while its benchmark lost 0.7%, and fixed-income investments returned 0.5%, beating its benchmark, which lost 0.7%. Private equity was the only asset class that did not produce returns during the fiscal year, losing 0.7%; however, it trounced its benchmark, which lost 7.3%.

“Our disciplined strategy of maximizing returns while minimizing risk has resulted in a pattern of outperformance for the long term, exceeding the assumed rate of return for the three-, five- and 10-year periods,” CIO Andrew Junkin said in a release. “Against a backdrop of widely varying economic predictions, VRS investment professionals strategically managed the diversified portfolio to minimize losses and achieve a positive return with a lower level of risk.”

As of June 30, the VRS’ asset allocation was 33.0% public equity, up from 30.5% in 2022; 18.2% private equity, down from 18.8%; 13.6% credit strategies, down from 14.3%; 13.5% real assets, down from 14.9%; 12.8% fixed income, down from 13.1%; 3.5% multi-asset public strategies, down from 3.6%; 2.6% private investment partnerships, unchanged from last year; 1.9% cash, up from 1.0%, and 0.9% exposure management portfolio, down from 1.3%.


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