The Pennsylvania State Employees’ Retirement System (SERS) said its board has approved up to $250 million in new investments for the state’s pension system, and that it will be funded with cash.
Of the $250 million, up to $150 million will be allocated within SERS’ multi-strategy asset class to Glendon Opportunities Fund II, which focuses on non-control distressed credit and other special situation investments.
Up to $100 million will be invested within the private equity asset class, $50 million of which will be invested in Asia Alternatives Capital Partners V, LP, while the remaining $50 million will be put in Penn Asia Investors. SERS said the funds focus on primary, secondary, and direct co-investments throughout Asia, mainly in growth and buyout capital, with a minority share in venture capital and special situation investments.
In addition to the $250 million in new investments, the Pennsylvania SERS board also approved reallocating just over $1 billion within the portfolio. The reallocation includes approximately $249 million from fixed income, and $400 million of cash to the MCM Russell 3000 Index. It also includes approximately $358 million within the fixed-income portfolio to the PIMCO Core Bond (ex Treasury) portfolio.
The board also announced that it hired Invesco Advisors, Inc., to act as the stable value fund program manager for the state’s voluntary $3 billion participant-funded deferred compensation program. A stable value fund is a relatively low-risk asset class that focuses on capital preservation and liquidity, while providing returns to participants.
Additionally, the board agreed to amend the general investment consultant contract with RVK to include its assistance with a search for a third-party administrator for both the deferred compensation program and the defined contribution plan to be operational by the beginning of 2019.
To provide time for the request for proposal process, the board also agreed to extend its contract with Empower for one year for third-party administration of the deferred compensation program.
The SERS board also announced it has received a report from Dilworth Paxson, the outside law firm retained by the system’s audit committee to review SERS-related information that arose in a recent federal court case.
“The firm’s review found no compliance violations with SERS’ existing laws, regulations, and policies,” said SERS, “concluding that SERS Investment Office and an outside consultant acted in full compliance with their statutory and ethical responsibilities.”
Tags: distressed credit, Pennsylvania State Employees Retirement System, Private Equity, SERS