The New York City Retirement Systems generated a return of 10.3%, net of fees, for the fiscal year ending June 30, 2025, exceeding its target actuarial rate of return (7.0%).
According to the Comptroller of the City of New York’s latest annual report, the pension fund’s three- (9.4%), five- (8.5%), seven- (7.8%), and 10-year (7.7%) returns all exceeded the actuarial target rate of return. As of June 30, 2025, the system had $294.6B in assets under management.
The report noted the market was resilient in the wake of the new and expanded tariff regime, with U.S. stocks delivering double-digit returns in FY2025. That said, developed markets ex U.S. equities generated the highest return (16.2%), even outperforming the pension fund’s U.S. equities return (14.7%) for FY2025. As well, emerging market equities returned 14.0%. International stocks benefited from “both a significant relative valuation disparity to U.S. stocks and the tailwind of a depreciating U.S. dollar,” it added.
Public equities returned 4.5%, with the report highlighting continued outperformance of the “Magnificent Seven” stocks and positive price momentum in large-cap technology and artificial intelligence companies. Returns for small cap equities as measured by the Russell 2000 index were about half those of large cap, at 7.7% versus S&P 500’s total return of 15.2%, it said.
“The outperformance of large-cap names continued a pattern of increased index concentration, with the top ten companies accounting for nearly 38% of index market capitalization and almost 28% of earnings.”
Core fixed income generated a return of 6.2%, high-yield strategies generated 9.9%, and convertible bonds generated 10.1%. Infrastructure returned 11.9% — outperforming other alternative investment asset classes for the third consecutive year. The portfolio benefitted from investments in telecommunications, AI data center buildout, clean energy demand, and transportation sectors.
Private real estate returned 1.9% for the FY2025. The report attributed the portfolio’s performance to continued challenges with post-COVID decreased demand for commercial office space and the current high-interest-rate environment. It also noted the industry pivot from office to industrial construction led to an oversupply of industrial assets that has resulted in a slowdown in leasing activity that has been further exacerbated by tariff-related uncertainty. Notably, the Comptroller’s report said the Police and Fire portfolios were able to find some downside protection from exposure to hedge funds, as these strategies delivered an average 7.8% return.
Private equity generated a return of 11.9%, with the report noting a roughly $5B secondary sale, ultimately, lowered the overall performance in the class by nearly 4% in the short term. However, it also pointed out that the pension fund expects to benefit from a more streamlined portfolio as a result of the sale.
