The Board of the $34 billion Pennsylvania State Employees’ Retirement System earlier this month approved $150 million in new commitments to distressed debt, technology and secondary funds. All investments will be funded from cash as part of the pension fund’s long-term investment plan.
A €25 million ($40 million) slug will go to Avenue Europe Special Situations Fund LP, run by Avenue Capital Group. Now at €1.5 billion with no hard cap yet established, the fund focuses on senior secured debt and unsecured debt. Avenue Capital plans to target creditor-friendly jurisdictions, such as the United Kingdom, Germany, the Benelux countries and Ireland.
Sticking with the distressed-debt theme, Bayside Capital, an affiliate of HIG Capital, received $30 million from PA SERS for HIG Bayside Debt & LBO Fund II, which makes investments in distressed debt obligations and other securities of distressed mid-market companies. Having targeted $2 billion, the firm recently closed on roughly $3 billion for the effort, according to LBO Wire, published by Dow Jones & Co. The fund is a lower to mid-market distressed buyout pool focused mostly on the United States, but it may also do some investing in Europe.
PA SERS also pledged $30 million to Dover Street VII LP, a HarbourVest Partners dedicated secondaries vehicle targeting $2 billion. The funds-of-funds manager specializes in buying holdings in existing private equity funds and has raised more than $940 million in commitments as of February, as reported previously in Buyouts.
A $25 million commitment will go to Great Hill Equity Partners IV LP, a vehicle of Great Hill Partners, which focuses on education, business services, media, information, technology and communications. The firm is now investing its $750 million fund, Great Hill Equity Partners III LP, and is targeting investments of $50 million to $125 million. The firm seeks $1.2 billion for Fund IV.
On the venture capital front, Guggenheim Technology Ventures I LP will receive $10 million. Guggenheim Venture Partners focuses on investments in formation-stage and re-start technology companies in the components and communications industries. VC firm Vista Equity Partners will also receive $15 million from PA SERS as it works toward $1.1 billion for its third technology-focused fund.
PA SERS has previously committed to funds managed by Avenue Capital, HarbourVest and Great Hill Partners.