Pa. SERS commits $50 million to PE

The pension’s annual report shows an overall 2014 return of $1.7bn

The Pennsylvania State Employees' Retirement System will commit $50 million to Primavera Capital Fund II, according to recently released meeting documents. The vehicle is focused on growth equity and control oriented investments in China.

The allocation is the second so far this year. In January the pension system made a follow-on $50 million commitment to Francisco Partners IV. That fund focuses on middle market technology companies primarily based in North America, Europe, and Israel.

The pension system also released its annual report for 2014. Alternative investments returned 13.1 percent for the year, despite a negative return of -0.3 percent in the fourth quarter. In all, the total fund saw a positive 6.4 percent net return amounting to some $1.7 billion in investment earnings net of fees for the year.

“The alternative investments portfolio led returns for the year,” Pa. SERS CIO Tom Brier said in a statement. “The last half of 2014 was difficult for any U.S. investor in foreign markets. That said, we are seeing positive results from the global equity portfolio during the first two months of 2015.” 

The statement by CIO Brier is notable as Pennsylvania Governor Tom Wolf recently used part of his annual budget address to push state pension systems to invest in lower cost index funds over increasing allocations to alternatives.