The $76 billion Pennsylvania Public School Employees Retirement System (PSERS) approved commitments totaling approximately $548 million at its Aug. 5 board meeting, about $200 million of which was directed to the alternative asset class.
The system’s board also adopted changes fund’s investment policy, including asset allocation.
PSERS’ board approved a commitment of up to $100 million to EQT Exeter Industrial Value Fund VI, and a commitment of up to €95 million ($98 million) to TDR Capital V.
The board also authorized a $350 million allocation to Caspian Keystone Focused Fund, representing a new investment to its public fixed-income asset class, and the transfer of two other existing Caspian accounts totaling up to $275 million to the new fund.
PSERS had allocated previous investments to the absolute-return asset class, but the pension fund’s board eliminated the 8% target to that asset class in December.
Investment policy changes
At the meeting, the board also approved changes to PSERS’ investment policy, to be effective Oct. 1. An ongoing transition for private asset classes to a new target allocation is expected to occur over time through revised pacing schedules, according to board documents.
The fund’s consultant, Aon, recommended the following policy changes:
- Emerging Market Debt—change from three benchmarks to one. The change simplifies the benchmark, while also retaining similar characteristics to the current benchmark.
- Change the private to public equity over (under) weights to include all public equity. Currently this adjustment excludes the dedicated public market emerging market equities allocation.
- Update the ticker used for SOFR (Secured Overnight Financing Rate ) to one supported by the industry. The initial ticker adopted in March was preemptive and more research provided a more applicable benchmark.
- Adjust the risk benchmark used for private equity from a 65/35 US/Non-US split to a 70/30 US/Non-US split. This spit is deemed to be more reflective of PSERS’ private geographic representation.