The pension's director of private equity and co-investments, Darren Foreman, will retire in January, while Patrick Knapp, Tony Meadows and Philip VanGraafeiland are pursuing new opportunities, according to some of the people.
The pension fund said it doesn't comment on personnel-related matters, though a spokesperson said it has 63 investment professionals on the staff, a dozen of whom are primarily responsible for private markets. Departing members of the investment team declined to comment or didn't immediately respond.
The Pennsylvania school pension fund had about $76 billion of assets as of Sept. 30. Private equity accounted for about $12 billion of its portfolio as of March 31, according to its asset allocation report. That included funds managed by Apollo Global Management, Bain Capital and Cerberus Capital Management.
Private equity has performed well for the fund, delivering an almost 13% annualized return over the 10 years through March — the highest of any asset class, according to the fund's most recent quarterly performance report.
But that has left it with a higher allocation to the asset class than its target, and the fund has said it will invest less in private equity to lower the proportion from 17% to the targeted 12%.
That over-allocation puts the fund in the same position as other public pensions that are pulling back on private equity and creating a difficult fundraising environment for many buyout firms.
"I'm very much skeptical about private assets," PennPSERS Chief Investment Officer Benjamin Cotton recently told the Philadelphia Inquirer. "You should earn a premium for locking your money into nontraded assets."
Cotton's statement related to "an aversion to paying premium fees without earning a premium return on the investment, regardless of asset class," a PennPSERS spokesman said Dec. 7.