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Nebraska shelves private markets portfolio sale

The pension plan cited weak pricing as the reason for aborting the sale of the private equity and real estate fund stakes.

Nebraska Investment Council has aborted a potential sale of private equity and real estate fund stakes because of weak pricing, PERE sister publication Secondaries Investor has reported.

The proposed sale was in relation to assets held by the Omaha School Employees’ Retirement System, a $1.2 billion pension fund for which NIC took over management in January.

Aon Hewitt Investment Consulting was hired to help NIC bring the OSERS portfolio in line with the long-term asset allocation policy of three other state defined benefit plans, according to documents from the pension’s February 22 meeting. While NIC will be able to liquidate or reallocate around 70 percent OSERS’ legacy assets, around 30 percent of the portfolio is invested in illiquid positions scheduled to run off over the next ten years. 

Aon spoke to various market intermediaries and sourced indicative bids for the illiquid portfolio on behalf of the US pension manager, and recommended NIC refrain from selling any of the assets on the secondaries market because “discounts to current NAV [net asset value] are too large,” it wrote in a memo dated February 2.

OSERS had stakes in eight funds across private equity and real estate strategies which had a total value, including distributions, of $283.7 million as of 30 June, according to a second quarter 2016 performance report. It is unclear if the 30 percent of illiquid assets Aon refers to in the memo relates to these interests.

-Adam Le contributed to this story.

Click here to read the full story on Secondaries Investor.