Penn. pension revises returns, commits $283M

The Board of the Pennsylvania State Employees’ Retirement System (SERS) met this month and revised its 2005 investment returns and approved investments totaling about $283 million in seven private equity funds.

The board’s investment consultant Rocaton Investment Advisors, reported that SERS had a net investment return of 14.5% for 2005. This was an adjustment from an earlier report that put the pension system’s return slightly higher – at 14.9 percent.

This was the third straight year of investment return decline for SERS, which earned a 15.1% return in 2004 and a 24.3% return in 2003. The pension system noted in its announcement that it still places in the top 5% of public pension systems with more than $1 billion, according to stats provided by Wilshire Associates.

The board also authorized seven private equity investments totaling about $283 million:

* SERS approved up to $100 million for Bain Capital Fund IX. Boston-based Bain Capital is seeking $6 billion for the fund. Bain closed its eighth private equity fund with $3.5 billion in 2004.

* The pension system approved up to $50 million for Centerbridge Capital’s inaugural fund, Centerbridge Capital Partners I. The New York-based firm is raising a combination buyout and distressed debt fund and reportedly is seeking $2.5 billion. The firm was founded last year by former executives from Blackstone Group and Angelo Gordon.

* SERS committed $43 million for Chequers Capital’s Chequers Capital XV. The Paris-based private equity fund invests in non-technology companies in Europe.

* SERS approved up to $30 million for Francisco Partners’ new fund, Francisco Partners II. The Menlo Park, Calif.-based technology-focused private equity firm has raised more than $837 million for the fund, which has a target of $2.5 billion, according to Thomson Financial (publisher of PE Week).

* The pension board approved $25 million for Excelsior Capital Asia’s Excelsior Capital Asia Partners III. The firm has raised more than $109 million for the fund, which has a target of $300 million, according to regulatory documents. The firm is based in Hong Kong.

* SERS agreed to invest up to $25 million in Worldview Technology Partners’ fifth fund, Worldview Technology Partners V. The firm is seeking between $250 million and $300 million, according to Thomson Financial. The Palo Alto, Calif.-based venture firm raised $600 million for its fourth fund in 2000.

* The board also approved $10 million for Sigular Guff & Co.’s Sigular Guff BRIC Opportunities Fund. The New York-based private equity firm has raised more than $210 million for the fund-of-funds, according to Thomson Financial.

At its previous quarterly announcement in December, SERS committed $230 million to five private equity funds.