PA SERS Gets a Boost in Q1 2017 Earnings

The Pennsylvania State Employees Retirement System (PA SERS)’s net-of-fees earnings produced a 3.7% return of almost $1 billion during the first quarter of 2017.

According to a news release, the fund generated a total gain of $989 million, way up from last year’s $176 million Q1 earnings.

The returns mostly came from global public equity, which delivered 6.9% of Q1s earnings. The runners up were fixed income and hedge funds, delivering 1.9% and 1.4% of Q1’s return. Private equity and cash produced only 0.6% and 0.2% of Q1 returns. No returns came from real estate.

According to SERS, “all returns are reported net of fees and alternative investments and real assets lag by one quarter.”

In addition, the supplemental deferred compensation plan also saw assets rise to a record $3.2 billion.

The board also approved cash-funded commitments three private equity investments, which include up to $100 million to Apollo Investment Fund IX, LP. (focusing on distressed opportunities, corporate carve-outs, and opportunistic buyouts primarily in North America and including Western Europe), up to $100 million to CVC Capital Partners VII, LP (focusing on control and co-control buyouts in established upper middle market and large market global businesses primarily in Europe, and some in North America and the rest of the world), and up to $100 million to Insight Venture Partners X, LP (focusing on growth-stage software, software-enabled services and Internet companies).

 The investments will be “funded by cash subject to successful contract negotiations.”

Also approved was the Personnel Committee pay action recommendation, which will continue with consistent pay increases for management employees approved by the Governor’s Executive Board from July 1, 2017 through June 30, 2019. In addition, the board approved a 12-month extension of the Private Equity Consulting Agreement with StepStone Group LP, subject to successful contract negotiations.