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Ahead of a formal asset allocation study slated for next year, Oregon Treasurer Elizabeth Steiner has signaled support for further reducing private equity exposure in the $98.8B Oregon Public Employees Retirement Fund (OPERF).
In a letter to the Oregon Investment Council (OIC) and pension fund beneficiaries, Steiner cited high interest rates and persistent inflation, along with changing market dynamics, as reasons for caution, anticipating a trim in private equity holdings to about 25% by the end of 2025. Over the past two years, she noted, the OIC has already reduced the private equity allocation from 28% to 26%.
“In an environment of high interest rates and stubborn inflation, it is important to balance risk and growth,” Steiner wrote. “I am open to shifting our allocations in the future based on a wide range of inputs to navigate this environment.”
She added that, while private equity had historically delivered strong returns, she supported the OIC and staff’s decision to continue reducing OPERF’s private equity exposure to bring the allocation closer to the council’s 20% target.
As of August 31, OPERF’s private equity portfolio stood at 25.6% ($25.3B), compared with 18.4% ($18.1B) in public equities.
Steiner, one of five voting members of the OIC, will participate in the final approval of the new asset allocation study in 2026, according to a recent press release.
The letter further disclosed Oregon’s plans to commit to net-zero greenhouse gas emissions by no later than 2050, with an interim emissions intensity reduction target of 60% by 2035, relative to a 2022 baseline.
The net-zero plan seeks to reduce the amount of emissions associated with our investments, track progress over time, and strengthen investment returns, according to Steiner’s letter.
It also highlighted that the Climate Resilience Investment Act directs Oregon Treasury to pursue clean energy investment opportunities, build a more climate-resilient fund to safeguard OPERF’s long term value, and regularly report to the legislature to ensure public accountability.
