Pennsylvania commits $1.9bn to private equity

The Public School Employees' Retirement System committed to Sankaty’s $5bn distressed debt fund, Morgan Stanley’s $10bn real estate fund and Avenue Capital’s €5bn European distressed investment fund, among others.

The $63 billion (€41 billion) Pennsylvania Public School Employees' Retirement System (PSERS) has approved commitments totaling $1.88 billion to private equity and real estate vehicles, including Sankaty and Morgan Stanley’s latest mega-funds.

The pension committed up to $500 million to Sankaty Credit Opportunities Fund IV, which is targeting $5 billion and expected to close in June, and up to $400 million to Morgan Stanley Real Estate Fund VII Global, which is targeting $10 billion, according to pension meeting minutes.

PSERS also approved commitments of up to $200 million in Avenue Capital’s Europe Special Situations Fund, which is targeting €1.5 billion; up to $150 million in Landmark Equity Partners XIV, a US and European secondary fund targeting $2 billion; and up to $100 million in Evergreen Pacific Partners II, a middle market US buyout fund targeting $400 million with a hard cap of $550 million.

The pension is also committing up to $175 million in Paladin Realty Latin America Investors III, which is targeting $500 million, with a hard cap of $800 million; up to $100 million in Strategic Capital Partners Value Enhancement Fund II, which is targeting $500 million; up to $175 million to RCG Longview real estate debt fund, which is targeting $700 million and up to $100 million in the REIT AvalonBay Value Added Fund II, a $500 million multifamily apartment fund.