Ohio SERS Expands PE Portfolio

The Ohio School Employees Retirement System (SERS) continues to expand allocations to its $2.3 billion global private equity portfolio.

The investment committee approved $50 million to FS Equity Partners IX, a Freeman Spogli-managed middle market buyout strategy that would be placed in the SERS private equity portfolio, which presently constitutes 13% of the overall fund and is 1% below its policy target of 14%.

As part of a newly adopted asset allocation, officials increased their allocation to private equity from 12% to 14% in April, while decreasing their allocation to global stocks from 42% to 40%.

Trustees contributed $223 million to new investments in four broadly diversified funds and three co-investment vehicles during the fiscal year just ended. Kohlberg & Company’s Kohlberg Investors X, a U.S. middle market buyouts strategy within the private equity portfolio, received a $25 million commitment in February.

SERS plans to expand its co-investment approach in the coming year. Over three years, co-investments produced returns of 25.57% and 18.06%, respectively.

Co-investments are appealing because they allow investors to participate in specific investments that provide diversification and enhanced return possibilities while incurring no additional management expenses.