Pennsylvania Pension Returns 3.7% in Q3

Board also approves $175 million in new commitments. 

The Pennsylvania State Employees’ Retirement System (PSERS) reported a 3.7% return for the third quarter of 2017, and an 11.2% net-of-fees return on investments during the first nine months that added nearly $2.9 billion in earnings to the fund.

“Strong performance from the global public equity, private equity, and fixed income portfolios have driven strong calendar-year returns,” said PSERS CIO Bryan Lewis in a statement.

The returns kept pace with the system’s first-half returns of 7.1% that generated nearly $1.9 billion in net-of-fees earnings.

The PSERS board also approved up to $175 million in new commitments that will be funded from cash subject to successful completion of contract negotiations. The board approved a commitment of up to $100 million to Brightwood Capital Fund IV, L.P., to focus on private debt investments in US middle-market companies. The remaining $75 million was approved to Providence Strategic Growth III, L.P. as a follow-on investment to focus on growth equity investments in lower middle-market technology-enabled companies in North America.

The commitments come on the heels of $225 million in new commitments announced in November. Of this amount, $150 million was earmarked for its multi-strategy asset class to TSSP Adjacent Opportunities Partners, L.P., as a follow-on investment to the strategy the board approved in September. The fund will focus on the purchase or origination of opportunistic credit, special situations, and distressed investments. The other $75 million was committed to Clearlake Capital Partners V, L.P., as a follow-on investment to focus on value-oriented buyouts, credit/structured equity, and distressed/turnaround transactions involving North American middle-market companies.

The board also said it received a study, requested during its September meeting, in partnership with the administrator of the commonwealth’s voluntary 457 deferred compensation plan for state employees. The study investigated developing a plan to increase participation in the program among currently eligible employees and to identify the steps necessary to expand eligibility to municipal employees across the state. The board also directed the personnel committee to advertise for executive director candidates to fill the vacancy that will be left after the Jan. 5, 2018, retirement of David Durbin, which was announced in November.

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