Pennsylvania Public School Employees’ Retirement System | Pension360

Major Pensions Commit To Asia Private Equity Fund

A handful of pension funds have recently committed over $200 million collectively to the Baring Asia Private Equity Fund VI.

Pension systems making investments in the fund include the Texas County & District Retirement System, the Pennsylvania Public School Employees’ Retirement System, the Arizona Public Safety Personnel Retirement System and the San Francisco City & County Employees’ Retirement System.

From the Asian Venture Capital Journal:

Texas County & District Retirement System (TCDRS) has committed $50 million to Baring Private Equity Asia’s sixth pan-regional fund, which recently reached a first close of $3.2 billion.

The pension system, which had $24.5 billion under management as of June 2014, invested $40 million in Baring Asia’s previous fund. Earlier this year, it also allocated $40 million to the private equity firm’s first dedicated regional real estate vehicle, which is looking to raise $500 million.

Baring Asia Private Equity Fund VI has already exceeded its initial target of $3.2 billion. AVCJ was previously told that the vehicle has a hard cap of $3.85 billion, not including the GP contribution. Fund V closed at $2.46 billion in January 2011, beating its original target of $1.75 billion after just six months in the market.

Other disclosed investors in Fund VI include Pennsylvania Public School Employees’ Retirement System (PSERS) – also an LP in Baring’s previous three funds – which has committed $100 million, and San Francisco City & County Employees’ Retirement System, which is putting in up to $50 million. The Arizona Public Safety Personnel Retirement System is investing $20 million.

TCDRS has planned to increase its private equity holdings. Its current allocation is 8 percent, but its target is 12 percent.

In fiscal year 2013-14, TCDRS’ private equity portfolio returned 22 percent.

Pennsylvania Public Schools Fund Commits $200 Million To Real Estate

The Pennsylvania Public School Employees’ Retirement System (PSERS) has announced its decision to allocate an additional $200 million to its real estate portfolio; $100 million will go to the AG Core Plus Realty Fund IV, which targets a return of 14-15 percent before fees.

From IP Real Estate:

The plan made two new $100m commitments to the AG Core Plus Realty Fund IV and the pension fund’s in-house co-investment and secondary real estate programme.

Pennsylvania is the second US public pension fund to approve a new commitment to Realty Fund IV, following the Illinois State Board of Investment, which made a $30m allocation.

Courtland Partners, the real estate consultant for Pennsylvania, said Angelo Gordon & Co would continue its core-plus strategy of acquiring equity interests in high-quality assets likely to appreciate over time.

The fund will target underperforming office, retail, apartment and industrial assets, with an emphasis on the Top 15 US markets, shunning development projects.

Most assets will be in the US, although the fund can invest as much as 25% outside North America.

[…]

Targeted gross returns for the fund are 14-15%, with the current income component of the return projected to be 7-8%.

The fund will have a leverage component of 55-65%.

Pennsylvania has now committed a total of $200m to in-house co-investments and its secondary investment strategy.

The capital can be invested via co-investments on specific transactions with other funds, as well as by buying out other limited partners from existing positions in funds.

PSERS is also exiting the Prologis North American Industrial Fund, a fund of logistics and distribution facilities in the U.S.

PSERS committed $200 million to that fund in 2006, but the investment is now thought to be worth $167 million.

Pennsylvania PSERS Director Announces Retirement

Jeffrey Clay, the executive director of the Pennsylvania Public School Employees’ Retirement System (PSERS) yesterday announced his plans to retire. PSERS is the state’s largest public pension fund.

He’ll officially leave his position in March.