Pennsylvania Public School Employees' Retirement System, Harrisburg, will not be moving forward with up to $130 million in commitments to venture capital and growth equity fund Insight Partners XIII and its follow-on vehicles, spokesman Steve Esack in an email.
The $69.7 billion pension fund's board had originally approved the commitments at its June 9 meeting. Mr. Esack declined to comment on the reason the commitments are not moving forward.
It brings to a sudden halt an ongoing relationship between the pension fund and Insight Partners. PennPSERS had previously committed a total of $633 million to seven predecessor funds and co-investments since 2018, most recently committing $20 million to Insight Vision Capital II in 2022 and $75 million and $50 million, respectively, to Insight Partners XII and Insight Partners XII Buyout Annex Fund, both in 2021.
On June 20, the SEC announced it had charged the funds' manager, Insight Venture Management LLC, with overcharging management fees and failing to disclose a conflict of interest related to its fee calculations. The SEC said in a news release announcing the charges Tuesday that Insight's "limited partnership agreements for certain funds it advised" allowed the firm "to charge management fees based on the funds' invested capital in individual portfolio investments and required Insight to reduce the basis for these fees if Insight determined that one of these portfolio investments had suffered a permanent impairment."
The SEC said that from August 2017 to August 2021, the manager — also known as Insight Partners — charged excess management fees through inaccurate calculations, basing them on "aggregated invested capital at the portfolio company level instead of at the individual portfolio investment security level," as the LP agreements required.
Insight Partners officials could not be immediately reached for comment.