Ohio School Employees Retirement System, Columbus, approved new alternatives commitments totaling $138 million and increases in its targets to global real assets and global private equity.
The $17.3 billion pension fund's investment committee at its April 20 meeting approved commitments of $75 million to HPS Specialty Loan Fund VI, a core senior lending fund managed by HPS Investment Partners; a total of £31 million ($38 million) in aggregate to Bridgepoint Growth II, a pan-European lower-middle-market buyout fund, and a sidecar co-investment fund, both managed by Bridgepoint Group; and $25 million to IFC Core Farmland Fund, an agriculture fund managed by International Farming, according to meeting highlights emailed by spokesman Tim Barbour.
SERS previously committed $50 million each to HPS Specialty Loan Fund V in 2020 and €50 million ($55 million) to Bridgepoint Europe VII in 2020. IFC is a new manager for the pension fund.
Separately, the investment committee approved increasing its targets to global real assets to 20% from 17%, global private equity to 14% from 12% and cash to 3% from 2%, and decreasing its targets to global equity to 40% from 45% and global fixed income to 18% from 19%. The target to global private credit remains unchanged at 5%.
The changes are the result of an asset-liability study begun in December and conducted by the staff with the assistance of investment consultant Wilshire Advisors. "By reallocating 5% of the global equity allocation to private equity and real assets, staff believes cash flow will improve," according to the meeting highlights. "Private equity has an attractive return premium over global equity, and the increase in real assets will provide higher inflation protection. In addition, the marginally higher allocation to cash is prudent to meet liquidity needs."
Mr. Barbour said no manager changes or terminations would occur as a result of the lower global equity target.
As of Feb. 28, the pension fund's actual allocation was 41.4% global equities, 21% global real assets, 13.2% global fixed income, 12.4% global private equity, 5.8% global private credit, 3.4% opportunistic and tactical investments, and the rest in cash equivalents.