SERS Ups Its PE Allotment –

The $24.7 billion Pennsylvania State Employees’ Retirement System (SERS) added $130 million worth of commitments to its private equity portfolio, part of an effort to boost the portfolio’s size by 4% over the next four years.

At their monthly meeting last Wednesday, trustees of the pension fund committed $50 million to Bain Capital VIII, a Boston-based buyout fund slated to close with $8 billion. The pension fund said it would also invest $30 million in Gryphon Partners III, a buyout fund being raised by San Francisco-based Gryphon Investors whose size has not been disclosed. SERS also allocated $50 million to Oak Investment Partners’ 11th fund, a multi-stage investment fund whose size has not yet been disclosed yet. However, the firm’s two previous funds each topped $1 billion.

About $2.6 billion of the fund’s total investment pool, or 10.8% of its total value, sits in private equity and venture capital funds. It is increasing the size of its portfolio incrementally- by the end of this fiscal year the pension plan’s private equity portfolio is expected to make up 11.7% of the fund’s total value.

SERS is doing all this despite the fact that the fund’s private equity portfolio was down 5.2% for the fiscal year ending June 30, 2003, while its venture capital portfolio lost 27.3% of its value during that same period.