Pennsylvania Public School Employees' Retirement System, Harrisburg, agreed to commit a total of $860 million to six alternative investments funds, documents from the $56 billion pension system's website show.
At its March 9 meeting, the board agreed to commit up to $200 million each to Platinum Equity Small Cap Fund, a private equity fund; and HS Group Sponsor Fund II, an Asia-focused hedge fund. PennPSERS has committed to previous Platinum Equity funds; HS Group is a first-time commitment for the pension fund.
The pension fund also agreed to commit €150 million ($185 million) to ICG Europe Fund VII, a European-focused middle-market debt fund managed by Intermediate Capital Group. The pension fund has committed to two previous ICG Europe funds.
PennPSERS also agreed to commit up to $100 million each to K4 Private Investors, a lower-middle-market private equity fund managed by K1 Investment Management, and Cabot Industrial Core Fund II, a core real estate fund managed by Cabot Properties. K1 is a new relationship for PennPSERS; the pension fund has committed to several other Cabot funds.
Finally, the board agreed to commit up to $75 million to Webster Capital IV, a North American lower-middle-market buyout fund. This is PennPSERS' first commitment to a Webster Capital fund.
As of Dec. 31, the pension fund had 13.6% allocated to private markets, 10.2% to real estate, 9.7% to absolute return/hedge funds and 9.4% to credit-related investments.
Investment consultant Courtland Partners advised on the Cabot commitment. Hamilton Lane advised on the remaining commitments.
PennPSERS earned 12.3% for the year ended Dec. 31, above the benchmark return of 11.7%. It also posted annualized returns of 6.9%, 7.6% and 4.2% for the three, five and 10 years, respectively, ended Dec. 31.
