Pennsylvania’s PSERS makes debut CD&R investment

The $70 billion pension makes its first investment to a Clayton, Dubilier and Rice private equity vehicle.

  • Name: Pennsylvania Public School Employees’ Retirement System
  • HQ: Harrisburg, US
  • AUM: $70.3 billion
  • Allocations to alternatives: 30%

Pennsylvania Public School Employees’ Retirement System has backed Clayton, Dubilier & Rice‘s latest buyout vehicle, according to materials from their December 2022 Investment Committee meeting.

Marking the beginning of an investment relationship between PSERS and CD&R, the pension committed $100 million to Clayton, Dubilier & Rice Fund XII. The vehicle, which launched in May 2022, is targeting $20 billion with a hard-cap of $23 billion. The fund held a $15 billion second close in December 2022.

In line with prior funds, CD&R thematically targets opportunities located within the industrials, healthcare, consumer and retail, technology, and services sectors, and expects to opportunistically target businesses in the financial services sector. CD&R has allocated 30% of the fund to industrials, 25% to healthcare, 20% to technology, 15% to consumer and retail, and 10% to business services. CD&R intends to allocate approximately 70% of the fund to North America-based companies and approximately 30% to those in Europe.

PSERS is currently on target for its private equity allocation, putting 12 percent of its investment portfolio towards the asset class. This equates to around $8.4 billion in capital.

As illustrated below, PSERS’ recent private equity fund commitments have tended to focus on buyout vehicles that invest in North America.

Hamilton Lane acts as a private markets investment consultant for PSERS and assisted the pension with recommendations on the commitment.

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