PSERS expands co-investment, secondaries program by $50 mln

  • Expansion will fund program through end of year
  • $52.4 bln pension commits $150 mln to Bain Asia fund
  • Re-ups $50 mln to healthcare specialist Aisling Capital 

The $52.4 billion pension allocated up to $200 million across a pair of funds. It also earmarked another $50 million for its in-house co-investment and secondaries program, which will allow staff to continue investing through at least the end of the year, according to an investment memo.

Pennsylvania PSERS has completed $228.3 million of investments across 19 companies since it launched its co-investment and secondary program in 2012. The program was generating an IRR in excess of 35 percent as of Aug. 5, according to the memo.

In addition to beefing up its budget for new co-investments and secondary deals, Pennsylvania PSERS allocated up to $150 million to Bain Capital’s third Asia fund, a $2.5 billion vehicle that will likely hold a final close in September 2015, according to retirement system documents.

Bain Capital plans to invest between $100 million and $300 million of equity per deal in companies based in Japan, Greater China, India, Australia and Southeast Asia, according to Pennsylvania PSERS documents. Bain Capital Asia Fund II, the firm’s $2.3 billion fund from 2012, was netting 1.3x and an 18.4 percent IRR.

The pension also re-upped as much as $50 million to Aisling Capital IV, which is targeting $400 million with a $500 million hard cap for investments in healthcare businesses, according to pension documents.

Aisling Capital, which is based in New York City, typically invests $10 million and $40 million per deal, and will likely assemble a portfolio of around 25 investments through its fourth fund. The firm’s previous fund, a 2008 vintage vehicle that raised $650 million, netted a 25.3 percent IRR and a 1.88x multiple, according to pension documents.

Pennsylvania PSERS had a 15.3 percent allocation to private market strategies as of March 31, 1.7 percentage points short of its target. The private markets allocation includes its $5.8 billion private equity portfolio, as well as its holdings in private debt ($1.12 billion) and venture capital ($905 million).