Verdad examines the long-term private equity experience of the Oregon Public Employee Retirement Fund, highlighting how industry evolution has reshaped returns over time. Despite a 15.5% net IRR historically, performance has lagged public benchmarks, raising questions about scalability, manager selection, and timing.
Verdad Weekly Research: Lessons from Oregon
Verdad
Research
3 Pages
Key Takeaways
Declining Industry Returns: Private equity free cash flow yields have fallen sharply since mid-2000s, with returns trailing public benchmarks like Russell 3000 +300bps over the past decade.
Top Quartile Scarcity: Only 18% of OPERF fund investments reached top quartile, despite decades of experience and top-tier advisors guiding manager selection.
Procyclical Capital Deployment: Largest capital allocations occurred in expensive vintages post-2005, contributing to weaker outcomes compared to earlier periods with lower entry valuations.
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