Massachusetts’ pension fund returned nearly 14% in 2012, 84 basis points or 0.84% above its benchmark, its board reported.
According to Michael Trotsky, executive director and chief investment officer of the Massachusetts Pension Reserves Investment Management, or PRIM, board, five of seven asset classes beat their benchmarks and the other two were even.
“This strong performance report is an indication that our asset allocation strategy is sound and our investment managers are performing well,” Trotsky said Tuesday at the board meeting in Boston.
The Pension Reserves Investment Trust core fund ended the calendar year with a $51.9 billion balance, up from $47 billion the previous year.
Global equities and value-added fixed income returns were 17.5% and 15.2%, respectively, ahead of their respective benchmarks of 17% and 12.8%. Hedge funds, net of fees, returned 8.4% against a 4.8% benchmark.
PRIM’s nine-member board meets monthly. Its chairman is state Treasurer and Receiver-General Steven Grossman, who is an ex-officio member. Its investment, real estate and administration/audit committees will meet March 19, 20 and 21, respectively. The full board will next meet on April 2.
The PRIM board also hired private equity veteran Michael Bailey of Winchester, Mass., as director of private equity. PE amounts to roughly 10% of the PRIM portfolio.
“Private equity is an essential part of our investment mix,” Trotsky said.
Bailey, who will begin Feb. 26, has 26 years of experience in pension, investment banking and investment manager environments. He will come from HighVista Strategies LLC, a Boston endowment investment fund.
Previously, he headed the private equity group at Lucent Asset Management Corp., also of Boston, and Deutsche Bank and JPMorgan in New York. He graduated from Northwestern University.