Pennsylvania SERS commits $200m to private equity(2)

The $25bn pension committed $50m each to funds managed by Asia Alternatives, Bank of America Merrill Lynch, FSN Capital, and GTCR.

The Pennsylvania State Employees’ Retirement System has approved $200 million in private equity commitments, according to documents from the pension board’s Wednesday meeting.

The commitments include $50 million each to Nordic-focused FSN Capital’s Fund IV and US mid-market firm GTCR’s Fund XI. Pennsylvania also committed $50 million to Penn Asia Investors, a co-investment fund managed by Asia Alternatives, and $50 million to the Horizon Impact Fund, a customised fund of funds managed by Bank of America Merrill Lynch Capital Access Funds Management.

FSN Capital launched its fourth fund at the beginning of the year and is targeting between €400 million and €500 million for investments in mid-sized Nordic companies in Sweden, Denmark, Norway and Finland. FSN’s prior fund, a 2008 vintage, closed on €375 million and attracted investments from limited partners including Edinburgh-based asset manager Scottish Widows Investment Partnership and Norwegian insurance company DNB ASA, according to Private Equity International’s Research and Analytics division. 

GTCR XI launched earlier this year with a $3.25 billion target for mid-market investments. LPs in the fund include the Ohio Police & Fire Pension Fund and the Maine Public Employees’ Retirement System. Pennsylvania has previously invested with GTCR. 

Pennsylvania’s commitment to Asia Alternatives Management’s co-investment vehicle is part of an existing mandate focused on opportunistic investments in Asia-based private equity funds including the Greater China, Japan, Korea, India, Australia and Southeast Asia markets.

Pennsylvania is the only limited partner in the Horizon Impact Fund, which will invest in private equity funds smaller than $500 million in the US lower mid-market.

All of the commitments broaden the pension’s geographic diversification in its portfolio and bring the buyout portion of its alternative investments to 62 percent, as of 30 June. Pennsylvania is aiming to increase buyouts to 65 percent of its alternatives portfolio, according to a statement from the pension.

Pennsylvania has about $25.4 billion assets under management and allocates 14.5 percent of its assets to private equity, according to the system’s 30 June Asset Allocation Report.