The Pennsylvania Public School Employees’ Retirement System (PSERS) will allocate $200 million to its existing secondaries and co-investments programmes in a move to reduce fees, enhancer returns and bolster existing GP relationships.
The US pension fund has approved allocations of $100 million each to its private debt and real estate co-investment and secondaries programmes, which were respectively launched in 2012. The plan is for each asset class to increase its exposure to existing funds managers, typically investing no more than $15 million per deal.
Recommendations were made to the pensions’ investment board by PSERS private markets and real estate managing director Charles Spiller.
Spiller wrote that investing more via co-investments and secondaries gives the pension “potential for better returns” and that this was a “current trend in the industry”.
As part of his recommendation, Spiller also referenced the pension’s historic private equity secondaries relationships and the fees and carry paid to those managers. They include:
• Coller International Partners VI (2010) – 1.5 percent fee and 10 percent carry
• CS Strategic Partners IV, IV VC, and IV RE (2008 Vintage) and V (2011 Vintage) – .75 percent fee and 12.5 percent carry
• Partners Group Secondary 2008 (2007 Vintage) – 1.25 percent fee and 10 percent carry
• CS Strategic Partners III, III VC, and III RE (2005 Vintage) – .25 percent fee and 5 percent carry
• Landmark Equity Partners XIV (2008 Vintage) – 1 percent fee and 10 percent carry
• Landmark Equity Partners XIII (2006 Vintage) – .50 percent fee year 1, .75 percent year 2, then 1 percent and 10 percent carry
• Greenpark International Investors III (2007 Vintage) – 1.25 percent fee and 12.5 percent carry
• CSFB Strategic Partners II & II RE (2003 Vintage) – .25 percent fee and 5 percent carry (1st $200M); then 0.75 percent fee and 10 percent carry
• DLJ Strategic Partners (2001 Vintage) – .50 percent fee and 5 percent carry