PennSERS makes latest commitments to Veritas, Blackstone as it lowers investment return assumption


The Board of the Pennsylvania State Employees’ Retirement System has picked Veritas Capital and Blackstone for its latest round of alternative asset fund commitments.

The institutional investor has committed up to $100m to Veritas Capital Fund III and up to $25m to the sidecar vehicle that will co-invest with it.

Veritas is believed to be targeting $10bn for Fund VIII, which would reflect massive growth from the $6.5bn predecessor it raised in 2019.

It was revealed last week that the firm had picked up $60m from the Montana Board of Investments. The fund had also collected $250m from Oregon Public Employees Retirement System in March.

Veritas was said in February to be bidding to take £2.3bn Nasdaq-listed Houghton Mifflin Harcourt private.

It also scored a hefty return selling healthcare software developer athenahealth to buyout pair Bain Capital and Hellman & Friedman in a $17bn deal last year.

SERS’ has also committed up to $75m to Blackstone Real Estate Partners X.

The fund had already secured up to $75m from Arkansas Teacher Retirement System earlier in the month.

Blackstone Real Estate Partners X is the successor to the world’s biggest closed-end private equity real estate fund.

Blackstone raised $21bn for BREP IX in 2019. Other backers of Fund X include the Minnesota State Board of Investment, which made a $200m commitment last month.

SERS has made a 2.78% return from private equity in the first quarter of 2022, making it the third best-performing asset class in its portfolio. Real estate came first with a 3.56% return.

TIPS, fixed income, US equity, international developed markets equity and emerging markets equity all posted losses for the period.

The pension fund major has also lowered its investment return assumption from 7% to 6.875% effective December 31.

SERS executive director Joe Torta said, “The board carefully considered a number of options, ultimately settling on an eighth of a percentage point reduction.

“The incremental reduction reflects a reasonable long-term target to be achieved over the next 20 to 30 year period, given current market projections, and is right in line with our peer systems.”

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