Pennsylvania State Employees' Retirement System, Harrisburg, committed $125 million to a private equity fund, hired a high-yield fixed-income manager to run $500 million, and extended its contract with its current private equity investment consultant, the $34.5 billion pension system announced.
At its Wednesday meeting, the PennSERS board agreed to commit up to $500 million over time to the BNYM Mellon DB SL High Yield Beta Fund from BNY Mellon.
The board also agreed to commit up to $125 million to Hellman & Friedman Capital Partners X, a large-cap buyout fund.
In addition, the PennSERS board agreed to extend its current contract with its private equity investment consultant, StepStone Group, for 18 months.
The board also approved an advance funding agreement allowing the Pennsylvania State System of Higher Education to make a lump sum payment of $825 million to pay off the portion of the pension system's unfunded liabilities in exchange for credits against future employer contributions. The payment must be made by April 30 and will become part of PennSERS' portfolio.
After previously announcing that the pension system returned a net 11.11% for the year ended Dec. 31., PennSERS announced that returns during this period were as follows: emerging markets equities returned 24.45% for the year ended Dec. 31, followed by U.S. equities, 21.28%; private equity, 18.37%; Treasury-inflated protection securities, 11.04%; international developed markets equities, 9.62%; private credit, 9.08%; fixed income, 5.78%; real estate, 2.11%; and cash, 0.64%. All returns are net of fees.