Pennsylvania Public School Employees’ Retirement System has increased its private credit allotment amid decreased in private markets and real estate, board documents showed.
PSERS’ board approved during its September meeting a recommendation to drop its private markets target allocation to 15 percent of its portfolio from 16 percent. It raised its credit-related investments target to 11 percent from 9 percent, citing opportunities in private debt as driving the decision.
“The reduction to private markets and real estate are consistent with the long-term target allocation…while the increase in the credit-related asset class is considered to be an enhancement to the current target allocation due to the on-going relative attractiveness of private debt investment opportunities identified by the staff,” the resolution read.
PSERS’ private markets portfolio, which includes private equity investments, totaled $7.67 billion or 14.9 percent of the pension plan’s total portfolio as of 31 March. Real estate totalled $5.91 billion or 11.5 percent of the PSERS total portfolio as of the end of first quarter.
The pension’s recent investments include $150 million to Bain Capital Fund XII, $200 million to New Mountain Partners V and $250 million to Apollo Investment Fund IX, according to PEI data.
PSERS’ total portfolio earned returns, net of fees, of 12.7 percent for the one-year period ending 31 March; 5.7 percent for the three-year period ending that date; 7.1 percent over five years and 4.2 percent for the 10 years.