PennSERS earmarks $550 million for emerging markets, alts

Pennsylvania State Employees' Retirement System, Harrisburg, approved up to $550 million in investments, according to an announcement from the $29.3 billion pension system.

The board on Wednesday moved to commit up to $100 million each to Audax Direct Lending Solutions Fund, a private debt fund managed by Audax Group focused on U.S. middle-market companies; and Hellman & Friedman Capital Partners IX, a buyout fund focused on businesses in North America and Europe.

PennSERS' board also agreed to commit $75 million each to Audax Private Equity Fund VI, a North American lower-middle-market buyout fund; and TCV X, a private equity fund that focuses on technology firms managed by Technology Crossover Ventures.

Funding for these commitments will come from cash and be subject to successful contract negotiations.

Also at its meeting on Wednesday, the board moved to add up to $100 million each to Macquarie Group's and Martin Currie's existing emerging markets portfolios. Funding will come from the BlackRock (BLK) MSCI World ex-U.S. index fund and cash.

BlackRock's index fund had $331.3 million as of Dec. 31, according to the system's annual report. PennSERS had $343.2 million in Macquarie Group's emerging markets portfolio and $343.4 million in Martin Currie's as of the same date.

In addition, the board selected the Pennsylvania Treasury to manage the short-term investment fund, a money market fund for the new defined contribution plan scheduled to launch Jan. 1. PennSERS also hired BNY Mellon unit Mellon Capital Management to manage the passive core investment options for the new DC plan. The options are a: global non-U.S. stock index, U.S. all-company stock index, U.S. large-company stock index, U.S. small/midcap company stock index, U.S. Treasury inflation-protected securities index, U.S. bond index and short-term bond index.

The board also selected Charles Schwab to be the DC plan's self-directed brokerage option provider; the option will include exchange traded funds and mutual funds. BlackRock will provide and manage the plan's target-date fund option.