Investment FAQs

PERA operates a relatively low-cost investment program. In total, PERA manages $75.1 billion in assets on behalf of more than 730,000 members, retirees, and beneficiaries. In 2025, PERA spent $248.5 million on internal and external investment management expenses, or less than one-half of one percent of the total fund. In other words, PERA spends 33.1 basis points of total assets to manage a multi-billion dollar portfolio that is responsible for generating returns used to provide retirement income to hundreds of thousands of PERA members. By way of comparison to this annual cost of $248.5 million in investment expenses, PERA pays out $5.6 billion annually in benefits to retirees.

PERA’s final annual returns are available with PERA’s audited financial statements, typically June of the following year. Before year-end results are finalized, PERA asks for audited financial statements from the general partners in private equity and real estate partnerships. These are usually received approximately four months after year-end. 

PERA uses performance benchmarks for the total fund as well as each asset class and account. The benchmarks are chosen to be effective measures of success for the investment strategies and provide a baseline for measuring investment performance. The benchmarks are carefully selected and include characteristics so that they are appropriate, investable, measurable, and complete. Over time, the benchmarks are updated to reflect changes in the portfolio allocation. The policy benchmark, a passive representation of the asset allocation policy adopted by the Board, has been revised after the completion of asset/liability studies and/or changes to asset class benchmarks. 

The PERA Board determines the strategic asset allocation policy for the fund. The asset allocation policy is determined by a comprehensive asset/liability analysis. Expected investment returns, risks, and correlations of returns are considered. The characteristics of the fund’s liabilities are analyzed in conjunction with expected investment risks and returns. The targeted strategic asset allocation is designed to provide appropriate diversification and to balance the expected total rate of return with the volatility of expected returns.

An asset/liability analysis is performed every three to five years, or more frequently if necessary. 

The allocation to public equities and PERA’s other asset classes is periodically reviewed and changes tend to be small and gradual. For example, the allocation to public equities changed from 54% to 51% as of January 1, 2025.

PERA holds cash for the sole purpose of paying benefits and meeting other short-term obligations. Our investment strategy is to remain fully invested at all times while maintaining sufficient short-term liquidity. 

PERA does not directly own any cryptocurrencies in the Defined Benefit (“DB”) plan. The Capital Accumulation Plans (“CAP”, which consist of the 401k, 457, and DC plans) also do not have direct exposure to cryptocurrencies. However, both the DB and CAP have indirect exposure to cryptocurrency infrastructure such as technology (e.g., servers and other equipment), utilities (electricity for server farms) and publicly traded real estate (data storage locations). In addition, the plans may hold equity in companies which invest in cryptocurrencies or have business and/or other exposure to cryptocurrencies.

PERA has investments related to gold in various portfolios but owns no physical gold. Gold exposure often resides in a number of our equity and fixed income portfolios. 

Alternatives was created to pursue investments that do not fit into the other asset classes: Global Equity, Fixed Income, Private Equity, and Real Estate. Alternatives holds investments in private credit and real assets.

Yes, various derivatives are utilized in PERA’s portfolio. Each asset class has policies and manager restrictions that govern the types of investments that can be included in PERA portfolios and how these investments are to be deployed. The use of derivatives is carefully monitored on a routine basis. 

The short answer is no. The equity portfolio is well diversified. Colorado statutes include limitations on how much PERA may own of a particular holding. In addition, PERA determines portfolio guidelines for managers that foster diversification. 

Private Equity includes private equity limited partnership funds with various strategies including: buyout, venture capital, generalist debt, mezzanine debt, distressed debt, secondary funds, fund-of-funds, and energy-related strategies. PERA primarily invests as a limited partner in these funds. PERA reviews audited financial statements for each fund. Due to timing issues relating to when this information is provided to PERA by a small number of the partners and the time frame of the audit of PERA’s financial statements, a small number of audited financials are not received by PERA by the time PERA’s financial statements are released. PERA does receive audited financial statements on these investments and due to the timing, they are incorporated into the next year’s financial statements.

The risk of PERA’s investments is largely determined by the PERA Board’s strategic asset allocation policy which is formulated during the asset/liability process. The Board also has an active risk policy. Please see the Statement of Investment Policy for more details.

On the private market side, we consider financially relevant risks and opportunities, including ESG factors, pertaining to funds operated by private investment managers. PERA invests as a Limited Partner, meaning we have limited legal liability in the management of these investments. This status is advantageous as it allows us to gain exposure to private market opportunities while mitigating risks to PERA. Because of our Limited Partner status, we carefully select the funds in which we invest, but we do not influence fund-level investment decisions or the operations or management of individual portfolio companies held within those funds. The decision to invest in or exit companies within those fund portfolios is typically made by the fund sponsor, or General Partner, not by PERA as the Limited Partner.

PERA’s portfolio is well diversified and has investments like real estate and commodities that are expected to perform well if inflation rises. Certain inflationary environments could have a negative impact on the overall portfolio for a period of time. 

External managers are hired for numerous reasons; they may have deeper resources in smaller, niche markets or they may have particular strategies that complement our internal portfolios. PERA measures external manager results after taking into account management fees. External and internal managers are held to similar performance standards. The goal is to deliver attractive performance while accounting for risks and manager fees. 

PERA invests for the long term. The PERA Board carefully considers both risk and opportunity when determining the strategic asset allocation policy. Portfolio performance reflects market performance in large part. For the period ending December 31, 2025, the portfolio returned 9.5% over 10 years (net-of-fees) and 8.1% over 30 years (net-of-fees). PERA does not attempt to make large, tactical moves to add value. Tactical moves may be both high risk and subject to costly failure.

PERA manages more than 60% of its investments internally where PERA staff has the expertise and resources to do so successfully. The cost of PERA internal management is $23.6 million relative to the estimated cost of $124.0 million to outsource this management.