PSERS commits $720m to PE and RE

The $51bn pension plan has approved commitments of up to $220m to three private equity funds and up to $500m to two real estate funds.

The $51 billion Pennsylvania School Employees' Retirement System has approved commitments to three private equity funds and two real estate funds totaling $720 million.

PSERS committed up to $100 million to Capital International’s sixth fund, up to $70 million to Milestone Partners’ fourth fund and up to $50 million to Orchid Asia’s fifth fund.

Capital International launched Fund VI in December with a $2.5 billion target and $3.5 billion hard-cap, according to documents from the San Diego County Employees Retirement Association. The fund will make investments in emerging markets including Latin America, Asia and Eastern Europe.

Milestone Partners is targeting between $350 to $450 million for its fourth fund, according to media reports. The lower mid-market firm closed its third fund on $320 million in 2009.

China-based Orchid Asia held a first close on $327 million for its fifth fund in February. At the time, the firm had attracted more than two dozen LPs including HarbourVest Partners, JPMorgan Asset Management, United Overseas Bank of Singapore, Development Bank of Japan, Macquarie and Portfolio Advisors.

PSERS has also made sizeable commitments to Blackstone Real Estate Partners VII and Carlyle Realty Partners VI, up to $300 million to Blackstone and up to $200 million to Carlyle. Blackstone is understood to be targeting $10 billion for its seventh fund, while Carlyle is reportedly targeting $2 billion for Fund VI.

In April 2010, PSERS hiked its allocation to private equity to 21 percent from 18 percent to make room for $6 billion of unfunded commitments in the portfolio. The pension also transferred its 1.5 percent public real estate securities allocation to its private real estate portfolio, increasing it to 10.5 percent.