Asset AllocationJuly 28, 2023

Penn SERS Earmarks $100 Million for 2 Private Equity Funds

The pension fund also rehired NEPC as its real estate investment consultant.

Reported by Michael Katz

The Pennsylvania State Employees’ Retirement System’s board of trustees approved a commitment of up to $100 million to two private equity funds managed by KPS Capital Partners at its July 25 meeting.

The board approved a commitment of up to $75 million to the KPS Special Situations Fund VI and up to $25 million to the KPS Special Situations Mid-Cap Fund II.

The Mid-Cap Fund II seeks majority and distressed investments in underperforming or distressed lower- to mid-market manufacturing companies. Target companies include those experiencing transition or challenged by the need to effect operational change. The fund aims to achieve stability and profitability and to grow both organically and through acquisitions.

“The manager has a long track record of strong performance,” Penn SERS CIO James Nolan said in a release. “The commitment helps the fund consolidate capital with high-performing existing mangers.”

The pension fund’s board also extended the contract of NEPC LLC as its real estate investment consultant, signing the company to a five-year period that begins when the current contract expires on December 1. The board hired NEPC after a “competitive search process,” according to the announcement.

The board of trustees also unanimously approved a strategic plan outlining a “digital transformation” for the pension fund. The plan focuses on adding the option for digital services for members and growth opportunities for staff, according to Penn SERS.

“The way our members want to engage with us varies greatly person to person, and, in many cases, changes over a member’s lifetime,” Penn SERS Executive Director Joseph Torta said in the release. “The goal is to add to our service delivery methods to meet the varied needs of our membership.”