Pennsylvania PSERS Offloads Nearly $2 Billion of Funds-of-Funds As Part of Plan to Decrease PE Exposure


The Pennsylvania Public School Employees’ Retirement System (PSERS) has sold its stake in 17 buyout funds-of-funds. The stakes were collectively worth $1.75 billion, and the sale was part of a plan to reduce the system’s private equity portfolio from 16 percent of assets to 15 percent.

From Chief Investment Officer:

The Pennsylvania Public School Employees’ Retirement System (PSERS) has sold a $1.75 billion package of private equity investments to secondaries player Ardian.

The deal—one of the largest in 2014—included 17 limited partner stakes in private equity buyout funds-of-funds. Most of these investments focused on US large cap and middle market spaces, according to the public relations firm representing Ardian.

The $53 billion pension fund and Paris-based secondaries firm closed their transaction last month.

“PSERS is endeavoring to reduce its exposure to private equity to 15% of the fund’s size,” said the pension’s CIO James Grossman. “The depth of the secondary market makes possible a large asset sale that will bring us closer to our long-term target.”

Private equity accounted for 16.3% of the fund’s total portfolio as of September 30, 2014, according to PSERS’ documents. The pension began shedding exposure to the asset class last summer, reducing its total portfolio value by $415 million between June and September.

Last month’s deal with Ardian would bring PSERS’ private equity allocation down to roughly 12.7%.

Pennsylvania PSERS manages $53 billion in assets.


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