Pennsylvania SERS Returns 18.8% in 2019 | Chief Investment Officer

The $30.9 billion Pennsylvania State Employees’ Retirement System (SERS) reported investment returns of 18.8% net of fees for calendar year 2019, after losing 4.6% the previous year. The system also announced it has committed up to $500 million in new investments.

“The strong investment return added nearly $5 billion to the SERS fund in 2019,” Pennsylvania SERS Executive Director Terrill Sanchez said in a statement. Sanchez added that the robust returns, combined with full funding from the state’s general assembly, “are all working together to move the pension system toward full funding.”

Global public equity was the top performing asset class, returning 27% for the year, and 9.2% during the fourth quarter, followed by multi-strategy, which returned 14.7% for the year and 2.7% for the quarter. Real estate investments returned 11% for the year and 1.6% for the quarter, while private equity and fixed income returned 9.6% and 9.5% for the year, respectively, and 2.2% and 0.6%, respectively, for the quarter. Cash assets returned 2.3% for the year, and 0.5% during the final quarter.

As of the end of 2019, the fund’s asset allocation was 55.6% in public equity, 14.2% in fixed income, 12.7% in private equity, 6.7% in real estate, 5.9% in multi-strategy, 4.8% in cash, and 0.1% in legacy hedge funds.

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At its most recent board meeting, Pennsylvania SERS also approved $500 million in new investments, $450 million of which are going to private equity investments, with the remaining $50 million earmarked for real estate investments.

The private equity investments include up to $200 million to HarbourVest PA Co-investment Fund L.P., which invests in buyout, growth equity, and other private markets, up to $200 million to the Neuberger Berman PA Co-investment Fund LP, and up to $50 million to Altaris Health Partners V, L.P, which invests in health care- related businesses. The real estate investment is in the form of $50 million to Oak Street Real Estate Capital Fund V, LP.