Penn PSERS Adds $315M to Private Credit, Real Estate
The Pennsylvania Public School Employees’ Retirement System (Penn PSERS) made $315 million in commitments to its private credit and real estate portfolios in December.
Pension officials made a $165 million investment in Sixth Street Specialty Lending Europe III, a specialized lending fund. Sixth Street Partners aims to raise up to $2.6 billion for the fund. Penn PSERS invested in Fund II in 2021 and has achieved an IRR over 15% as of March 2024.
The Sixth Street investment is part of the $77 billion pension fund’s private credit allocation that remains set at 7%. For the year, Penn PSERS has allocated just over $500 million to the asset class, which is behind its original pacing plan.
The second allocation was in private real estate, which accounts for $8.4 billion, or 11.1%, of the overall investment portfolio. The asset class is currently overweight within the portfolio, and officials ended the year with approximately $450 million remaining to implement in their original 2024 pacing plan.
Trustees approved a $150 million commitment to WCP NewCold III, a fund that has seen a lot of institutional interest in recent months from the New York State Common Retirement Fund, Florida State Board of Administration and the New Mexico State Investment Council. Westport Capital Partners’ latest offering is a global cold-storage fund that is a $2.5 billion fundraise.
Penn PSERS had generated an annualized return of more than 8%, through June 30, 2024, with public equity leading the way with gains exceeding 19%. Private equity was outperformed by credit managers, which experienced gains of more than 7%. Conversely, private real assets experienced a mere 0.89% increase during the same period.
