To respond to a news release by the Treasury that their most recent quarterly returns have been excellent, Divest Oregon publishes this set of charts that focus on the following statements and question: Private equity hasn’t delivered superior performance over the long term to OPERF Treasury staff disregarded OIC private equity policy and invested too heavily for many years OPERF allocations to all forms of high-risk opaque private investments are out of step with peers Can an unreformed Treasury culture be relied on to implement Net Zero policy? A statutorily required OIC complete investment program audit is five years overdue Divest Oregon looks forward to a public statement from the Treasury that addresses these issues and questions.

At the September 3rd Oregon Investment Council (OIC) meeting, Divest Oregon members made strong statements about the need to curb private investments. Risky, illiquid, high-fees and low-returns investments obscure a lot of the emissions that PERS is funding - and are difficult to divest in times when the need to be nimble is more critical than ever. You can read some of the testimony about not following allocation policy financial and climate risk promises by the Treasurer stewardship concerns AFT-Oregon’s Harper Haverkamp spoke of concerns of 17,000 members that are reflected in the recent AFT/AAUP National report . This report calls out pension funds’ private investments as antithetical to AFT’s values. Nichole Heil, from Private Equity Stakeholder Project , traveled from California to speak about the climate devastation and financial risk of two private investments made by the Oregon Treasury. More media coverage is showing up around the state about private investments at the Oregon Treasury. See the September 2 article from Willamette Week and the Oregon Journalism Project entitled, “More Questions Arise About State Investments in Private Equity.”

Treasury’s Love Affair with Private Investments Doesn’t Add Up  Two recent, major investigations by The Oregonian and the Oregon Journalism Project in Willamette Week and statewide local newspapers, recently detailed significant problems with the Oregon State Treasury’s private equity overexposure for PERS. Following these publications, Divest Oregon has received questions about the information and risks of this exposure, which our coalition has tracked with concern for years. In this memo, we provide answers. By standard financial yardsticks, Treasury’s private equity investments in the past 13 years routinely underperformed the benchmark long established by the Oregon Investment Council (OIC). They regularly underperformed the broad US stock market. They have not provided exceptional returns. Simply put, Treasury’s love affair with private equity no longer adds up. OPERF’s 10-year rolling average private equity returns are substantially below OIC’s benchmark OIC Investment Policy 1203 (at p.11) says that OPERF's private equity allocation is managed to produce net excess returns “over very long time horizons, typically rolling, consecutive 10-year periods” (emphasis added). Below are the 1, 3, 5 and 10-year third-quarter private equity rolling returns Treasury presented to the OIC at its 1-22-2025 meeting , at p.59. All OPERF 1, 3, 5 and 10-year rolling returns are below OIC’s benchmark (Russell 3000 stock index + 3%) by substantial amounts, though Treasury's website at p.9 says 1-year stated returns are not meaningful.

Open Letter to Treasurer Steiner and members of the OIC: Recent reporting in The Oregonian , Willamette Week and OPB’s Think Out Loud have highlighted concerns about OPERF’s investments in private equity, including acknowledgement by Treasury that OPERF’s 20-year average return for that asset class is 33% below its market outperformance benchmark. According to those reports, this has resulted in significant investment losses that would not have occurred had OST balanced its portfolio following allocation targets set by the OIC. These losses have subsequently increased the tax burden of public employers, such as schools —schools that have now had to lay off teachers. This has meant that the $500 million increased school funding approved by the legislature in 2025 must be used to pay for increased PERS contributions, rather than being used to improve student outcomes as illustrated below. On the heels of these reports in the local media, the American Federation of Teachers (AFT), the American Association of University Professors, and Americans for Financial Reform released a report, From Public Pensions to Private Fortunes: How Working People’s Retirements Line Billionaire Pockets (July 30, 2025). The report summarizes in a solid, documented, and readable manner the many studies showing how private equity and related forms of private investment no longer deliver superior returns, particularly on a risk-adjusted basis, along with concerns about workforce management practices. The response from OST has been less than informative, with simple references to the need to invest “on a 40 year horizon,” which does not answer the critiques from investment experts quoted in the articles or noted in the above articles and report. It is time for OST leaders to explain to beneficiaries and the public in detail the rationale behind their unusual strategy, including: ● Given the uncertainties of our current economic situation, why do they think private investments will outperform others? ● What data are they using to support this view? ● What guidance are they being given, by whom, to follow this path? ● Given their reference to positive private investment performance in the past, aren't they simply “driving with the rear-view mirror?” It would appear from recent news reports that OST is taking undue risks with beneficiaries' pensions. It is time for OST to answer the criticisms raised. For your reference, we have attached a more detailed letter regarding the major issues raised and a list of questions posed by these news articles and reports. We look forward to your response. Sincerely, AAUP-Oregon AFT-Oregon Senator Jeff Golden Senator Khanh Pham Senator James Manning Representative Farrah Chaichi Representative Lisa Fragala Representative Mark Gamba Divest Oregon Coalition Attached below: Illustration of losses to Oregon school from the Willamette Week article.

“How the Managers of Oregon’s $100 Billion Pension Fund Ignored Expert Guidance and Lost Big” James Neff, Willamette Week August 5, 2025 ( link to article ) “Oregon’s pension fund bet big on private equity. That could be a problem” Ted Sickinger, The Oregonian , July 21, 2025 ( link to PDF ) Two recent articles published in The Oregonian and Willamette Week investigate the issue of the Oregon Treasury’s reliance on private investments in Oregon Public Employee Retirement Fund (OPERF). The Treasury’s over-dependence on these funds (often called “private equity”) led Divest Oregon to put forth the Pause Act in the Oregon legislature’s 2025 session. Although the Pause Act was not enacted into law, it raised questions around the Treasury’s overuse of private investments, that they: are heavily invested in the fossil fuel sector are secretive - with minimal oversight, charge high fees are more likely to oppose unionization efforts and are ten times more likely to go bankrupt than their peers not controlled by private equity, and, as the two recent articles demonstrate, they are not delivering for Oregonians. As Ted Sickinger explains in The Oregonian : "For decades, Oregon’s public pension system has been kept afloat by a gusher of income from its investments in private equity, opaque private partnerships that typically buy companies, manage them, then try to sell them at some point for big profits.The returns have played a meaningful role in maintaining the system’s financial health, routinely outpacing other investments and keeping a funding deficit caused by misguided benefit decisions decades ago from becoming even larger than the nearly $30 billion shortfall today. Yet in the past several years, even as the stock market has been booming, that private equity gusher has slowed to a relative trickle. That’s undermining the system’s total investment returns, causing cash flow issues and, as of July, contributing to another rise in the punishing contribution rates that government employers are required to make to the fund." James Neff, in Willamette Week , estimates that OPERF “lost out on” $1.4 billion in 2024 in its rate of return by relying on private investment.