PERSI has record year for portfolio returns

Private equity investments drag slightly, posting returns below sixteen percent

The Public Employee Retirement of Idaho (PERSI) posted double-digit returns for the overall portfolio on a year to date basis, according to meeting documents released today. With returns to the main Defined Benefit/Total Return fund of 17.2 percent and assets of $14.686 billion, PERSI reached all-time highs making the year one of its top ten to date.

PERSI overseen investment assets rose above $15 billion for the first time in its history, during this period as well. The pension is one of the few in the country that is over 90 percent funded.

Banner news indeed for any pension, however US global equity did present a slight drag on a portfolio where nearly all asset classes posted high double-digit returns.

The US equity portion of the portfolio reported overall returns of 21.2 percent, compared to US public equities, which reported a return of over 26 percent. Private equity investments, which are a portion of the US equity bucket, returned 15.7 percent – a slight drag from previous years, according to the pension’s annual report.

The fund recently increased its allocations to private equity alongside long-term added return hedges, which include S&P 500 and emerging market equities positions. The annual report notes the increase is part of a hedge against inflation.

In fiscal 2013, the pension fund committed over $195 million to private equity, with a strong bias toward buyout funds. Those commitments included: American Securities Opportunities Fund III ($30 million); Apollo Investment Fund VIII ($40 Million); KKR North America Fund XI ($30 million); CVC Capital Partners VI ($35.6 million), and Hamilton Lane Co-Investment Fund III ($40 million).

The pension has only made a single commitment so far this year – $50 million to Lindsay Goldberg IV, a corporate finance/buyout fund. The allocation represents a re-up for PERSI.

The pension expects to make an additional 3-5 commitments reaching $175 – $250 million. PERSI is currently considering American Securities, Blackstone Energy, Bridgepoint, TPG, and Veritas for those additional commitments.