PA SERS commits up to $250 mln to Audax, Hellman & Friedman and TCV

Pennsylvania State Employees’ Retirement System board moved to commit up to $250 million across three private equity funds at its meeting on July 25, according to a press release.

The pension system committed up to

• $75 million to Audax Private Equity Fund VI, L.P., to focus on buyouts of lower middle market companies in North America,
• $100 million to Hellman & Friedman Capital Partners IX, L.P., to focus on large market buyouts in businesses in North America and Europe, and
• $75 million to TCV X, L.P., to focus on growth equity investments in technology and tech-enabled services companies across North America and Europe, according to the release.

Separately, the board committed up to $100 million to Audax Direct Lending Solutions Fund, L.P., to focus on private debt investments in U.S. middle market companies.

The retirement system’s alternative assets and real estate portfolio includes buyouts, special situations, venture capital, core real estate, natural resources and infrastructure, and legacy hedge funds.

Private equity composes 13.7 percent of the total fund, compared to a policy target of 16 percent. Buyouts are 8.4 percent of that total, while venture capital is 3.1 percent and special situations are 2.2 percent, according to an unaudited fund summary from March 31, 2018.

As of Dec. 31, 2017, the retirement system had contractual commitments totaling approximately $2.8 billion to fund future private equity and real estate investments over the next several years, according to its comprehensive annual financial report for 2017.

The $28.7 billion fund had membership of more than 239,000, as of December 31, 2017.

The total fund returned 15.1 percent over one year, 7.2 percent over three years, and 4.1 percent over 10 years.

Private equity returned 12.8 percent, 8.6 percent and 7.5 percent over the same time periods.

StepStone Group is the pension system’s private equity consultant.