Searches and Hires

Pennsylvania State Employees earmarks $175 million for 3 private equity funds

Pension fund returns 8.6% for year ended June 30

Pennsylvania State Employees' Retirement System, Harrisburg, approved a total of up to $175 million in new commitments to three private equity funds, said a news release issued by the $29.8 billion pension fund.

At its Wednesday meeting, the PennSERS board approved up to $75 million apiece to Vista Equity Partners Fund VII, a private equity fund that focuses on North American technology companies; and NGP Natural Resources XII, a natural resources fund managed by NGP Energy Capital Management that focuses on North American businesses involved in oil and natural gas production, midstream energy and oilfield services. It also approved a commitment of up to $25 million to NGP Keystone, another natural resources fund that focuses on North American oil and gas investments.

The commitments are subject to successful contract negotiations.

The board also approved 10 target-date funds for the state's soon-to-be launched DC plan. The suite includes nine funds separated in five-year increments starting with 2020 and ending at 2060. A post-retirement fund is also available to participants.

Participants who do not elect an investment option when they join PennSERS will be defaulted into an age-appropriate target-date fund.

Empower Retirement is the third-party administrator for the state's deferred compensation and DC plans. The system previously announced it hired BlackRock (BLK) to manage the target-date funds.

The PennSERS board also reported a net return of 8.6% for the 12 months ended June 30. Returns by asset class for the year ended June 30 were private equity 13%; global equities 11.2%; real estate 5.2%; cash 1.6%; fixed income 0.1%; and hedge funds -2.3%.

PennSERS' three-, five- and 10-year annualized returns as of June 30 were 6.6%, 7.6% and 4.5%, respectively.

For the year ended June 30, 2017, the pension fund returned a net 7.2%.