HARRISBURG -- The Board of Trustees of the PA Public School Employees' Retirement System [PSERS] voted Thursday to invest in three funds and to table an investment in another fund to allow investment professionals to gather more information.
The Board voted 11-1, with 1 abstention, to invest $200 million with Bain Capital Distressed and Special Situations 2019 (A). It is a high yield/private credit commitment that will focus on global special situations opportunities and distressed securities.
In a 11-0-2 vote, the Board also approved a $150 million investment with Hahn & Company III. It is a private equity commitment that focuses solely on companies based in South Korea.
Voting 10-2-1, the Board approved a $75 million investment with Incline Elevate Fund L.P. It is a private equity fund commitment that will seek opportunities in companies with enterprise values of between $30 million and $150 million.
The Board, on the recommendation of PSERS Chief Investment Officer James H. Grossman Jr. and PSERS Executive Director Glen Grell, tabled a resolution to invest in Platinum Equity Capital Partners V to gather more information. The decision came during the board’s public meeting in which two advocacy groups spoke against Platinum Equity’s 2017 purchase of a company, Securus, that manages inmate phone systems for multiple state prison systems, including the Pennsylvania Department of Corrections.
“PSERS does not have a social investment policy that prohibits or limits the type of investments the system can enter but we do follow the state legislation that prohibits investment in Sudan and Iran,” Grossman said after the meeting. “In addition, we know the cost of Pennsylvania inmates’ calls has fallen since the Department of Corrections hired Securus in 2014 and Platinum Equity has documented how it has improved Securus’ overall national operations since it took ownership. However, we thought it was prudent to ask the Board to postpone its vote until PSERS’ investment professionals could gather more facts and Platinum officials had a chance to address the Board.”
All investment commitments are contingent on PSERS’ legal staff approving all final contracts.
For more details on the resolutions go to: https://www.psers.pa.gov/About/Board/Resolutions/Pages/default.aspx
PSERS also reported the Fund earned 5.06% for the quarter ended March 31, 2019. Other returns included 5.54% for the one-year, 8.98% for the three-year, 6.25% for the five-year, and 9.63% for the 10-year periods ended March 31, 2019. Longer-term, the Fund earned 7.93% for the 25-year and 8.36% for the 30-year periods ended March 31, 2019. Additional details on PSERS investment performance are available on PSERS’ website at: http://www.psers.pa.gov/About/Investment/Pages/default.aspx
About the Pennsylvania Public School Employees' Retirement System
Founded in 1917, PSERS is the 15th largest state-sponsored defined benefit public pension fund in the nation. As of March 31, 2019, PSERS had net assets of approximately $57.2 billion and a membership of over 256,000 active school employees and over 233,000 retirees.