Pennsylvania Schools adds three relationships

The Pennsylvania Public School Employees’ Retirement System committed more than $350 million to new private equity relationships at its meeting last week, according to documents made available by the retirement system. 

The $49.5 billion retirement system spread its commitments across three funds, investing £75 million (€87.9 million; $118.1 million) in HgCapital 7, $100 million with Morgan Stanley Private Equity Asia IV and €100 million in Triton IV, according to documents.

Triton Partners is targeting €2.4 billion for Fund IV. The firm’s latest vintage will invest in German-speaking or Nordic-based mid-market companies, according to PSERS documents, with a focus on the industrial, business services and consumer sectors. 

The firm’s €2.4 billion 2009 vintage had generated a 1.1x multiple and 7 percent net internal rate of return as of 30 September, according to PSERS. Triton II, a 2006 vintage, has performed better – notching a 2.1x multiple and 20 percent net IRR. 

HgCapital is targeting £1.75 billion with a £2 billion hard-cap for its mid-market buyout vehicle, which will invest in Northern European buyouts with enterprise values between £80 million and £500 million. Fund 7’s portfolio will likely include 15 to 20 companies in the telecom, media, technology, industrials, healthcare and service industries.

HgCapital’s 2009 and 2006 vintages had generated net IRRs of 4 percent and 14 percent, respectively. 

PSERS smallest commitment last week went to Morgan Stanley Private Equity Asia IV, which is targeting $1.5 billion for buyout and growth capital investments in companies with “significant operations in Asia”, according to retirement system documents. The firm held a first close on $600 million for Fund IV in November. 

Morgan Stanley Private Equity Asia III – a $1.5 billion 2007 vintage – had generated a 1.1x multiple and 3.4 percent IRR as of 30 November, according to Pennsylvania documents. 

PSERS had a 16.7 percent allocation to private equity as of 30 September, according to retirement system documents. The private equity portfolio is part of the retirement system’s 21.8 percent allocation to private markets, which includes venture capital and private debt as well.