One of Ohio’s largest public pension funds lost more than half a billion dollars on a private equity investment in Panda Power Funds.
From 2011 to 2013, State Teachers Retirement System of Ohio invested $525 million with Panda but the investment is now valued at zero, according to pension fund spokesman Nick Treneff.
“Although currently marked at $0, efforts are ongoing to try to recover some value. While the Panda investments lost value, it is worth noting that more than 85% of STRS Ohio’s alternative investments have had positive returns,” he said.
Panda Power Funds is a private equity firm based in Dallas that develops, operates and manages investments in clean energy, according to its website.
Treneff said despite the loss, STRS Ohio’s alternative investment program has had an average annual return of 11% over the past decade.
Each pension system has a careful mix of assets including stocks, bonds, real estate and other investments. The systems have alternative investments that include money managed by private equity or hedge fund managers. Such investments are riskier and can result in big losses or gains.
Overall, Ohio’s five public pension funds have $234 billion invested on behalf of nearly two million government workers, retirees and beneficiaries. The pension funds strive to hit or exceed their expected rate of return every year to cover the obligations of current and future benefits.
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