PSERS puts $145m in private equity

The US public pension continues to vary its private equity exposure.

  • Name: Pennsylvania Public School Employees’ Retirement System
  • HQ: Harrisburg, US
  • AUM: $76.0 billion
  • Allocations to alternatives: 30%

Pennsylvania Public School Employees’ Retirement System has confirmed $145 million in commitments across two private equity vehicles, according to materials from the pension’s recent investment committee meeting.

PSERS has allocated $125 million to Incline Equity Partners VI, alongside a further $20 million to Insight Vision Capital II. These commitments are taken respectively from the pension’s buyout and venture capital portfolios.

Incline is a Pittsburgh-based private equity firm that invests across the North American mid-market. Incline Equity Partners VI is the GP’s ninth investment vehicle and will focus on business services, value-add distribution, and specialised light (or niche) manufacturing sectors. Incline is targeting $1.75 billion for the fund, with a $2 billion hard-cap also in place.

Insight Partners is a manager of private investment funds that focuses primarily on  investing in growth-stage software, software-enabled services and internet businesses. Insight Vision Capital II will operate as a fund of funds as a passive investor, with the goal to add value for the fund and its limited partners while simultaneously opening doors for smaller venture capital firms owned and operated by women and minorities. Insight is targeting $50 million for the fund, setting a hard-cap of $150 million.

These commitments strengthen PSERS’s existing relationship with both firms. Since a debut commitment in 2001, PSERS has committed $567.2 million to Incline vehicles as of 31 March 2022, peaking with a $150 million commitment to Incline Equity Partners V in 2020.

While this commitment represents PSERS’s first investment in the Insight Vision strategy, the pension has previously committed to six funds and three co-investments with Insight, totalling $613.9 million as of 30 June 2022.

PSERS maintains a fairly diverse private equity portfolio. While dominated by a 69.5 percent exposure to buyout investments, the remainder of the portfolio covers growth equity (12.7 percent), venture capital (8.3 percent) and co-investment (9.5 percent).

PSERS currently allocates 12 percent of its total investment portfolio to private equity, totalling $9.12 billion in capital. As illustrated below, the pension’s recent private equity commitments have focused on North American vehicles with a diversified sector stance.

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