Firms & Funds

PA SERS backs Ares and Permira in latest round of PE funding

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Pennsylvania State Employees’ Retirement System, pension funds, private equity, PA SERS
A view of the Pennsylvania State House from the State Street Bridge in Harrisburg on Jan. 18, 2012. Reuters/Tim Shaffer
  • AUM: $28.8 bln
  • PE Target: 16 pct
  • Contact: Pam Hile, phile@pa.gov

Pennsylvania State Employees’ Retirement System at its April meeting committed $875 million to private equity funds, in line with its 2018-2019 investment plan, meeting documents show.

The investment plan set its annual pacing for new PE commitments at $650 million to reach its target allocation of 16 percent. Its current annual pacing sits at $750 million.

Board commitments include:

  • $330 million to Ares PA Opportunities Fund. Ares Management uses its flagship funds to gain majority or shared-control investments in companies in North America and Europe, its website says;
  • $70 million to Ares Special Opportunities Fund;
  • €67 million ($75 million) to Intermediate Capital Group’s Europe Mid-Market Fund SCSp, which focuses on mid-market corporate sector investments;
  • €67 million euros ($75 million) to Permira‘s seventh fund, targeting $12 billion, according to Bloomberg;
  • $100 million to Permira Susquehanna Co-investment Fund;
  • $75 million to Permira Credit Solutions IV Master Feeder SCSp;
  • $50 million to Ardian Investment Switzerland’s VII PA Co-Investment Fund. PA SERS explored co-investment opportunities to lower its management fees; its investment plan shows;
  • $100 million to ASF VIII, a secondaries investment fund, targeting $12 billion, according to Secondaries Investor.

The board also extended its relationship with consultant StepStone until April 5, 2021.

PA SERS designed its PE program to produce high returns and growth opportunities, the 2018-2019 Investment Plan says. During Q4, PE was the strongest performer for the system, generating 1.6 percent PE returns, Buyouts reported.