As executive director of the Pennsylvania Public School Employees' Retirement System, I read with interest your Jan. 23, page 2 article concerning public funds with no African-American managers.
I was surprised to see Pennsylvania PSERS included in this list. PSERS has hired minority-owned investment firms and, in fact, has been at the forefront of creating opportunities for minority-owned investment firms. Over 10 years ago, PSERS' board of trustees approved the creation of a Developmental Fund program to assist emerging minority, women and Pennsylvania-based global and domestic equity investment management firms.
PSERS' Developmental Fund program formally began operating in April 1995 and currently has 18 managers, including African-American, Asian-American, Hispanic-American and Native American-owned investment management funds. Each manager selected receives an initial allocation of $15 million with the opportunity to receive up to $35 million. Minority- and women-owned investment management firms must be approved by the Office of Minority and Women Business Enterprise in accordance with state policy and law.
The Developmental Fund has grown from nearly $163 million in 1995 to more than $707 million in assets today and has produced positive investment returns of 10.78% annualized from inception of the program. Two of the Developmental Fund managers have been so successful that they "graduated" from the Developmental Fund and are now investment managers in PSERS' main fund.
Additional information on PSERS' Developmental Fund program guidelines, eligibility requirements, and investment performance is available on PSERS' website at www.psers.state.pa.us.
PSERS has a fiduciary duty to prudently invest the assets of the fund and must ultimately rely on an investment manager's track record and performance. PSERS recognizes the success and value the Developmental Fund program has brought to the system and will continue to support this important effort to provide investment opportunities for qualified emerging minority managers.
Jeffrey B. Clay
Pennsylvania Public School Employees' Retirement System