The Pennsylvania State Employees’ Retirement System has committed up to $138 million (€86.9 million) to five private equity and real estate funds.
The $34 billion pension plan agreed at a board meeting yesterday to allocate up to $15 million to Arden Real Estate Fund I.
The fund is targeting $125 million, according to Arden’s website, and will focus on distressed and value-add real estate in the US and Caribbean, including luxury hotels and resorts, condominiums and single-family lot subdivisions. The fund will have a life of seven years and the firm expects IRRs of more than 20 percent net of fees.
Pennsylvania’s board also approved commitments of up to €50 million to the $6 billion European buyout fund, Charterhouse Capital Partners IX, as well as €20 million to Clessidra Capital Partners II. The pension also committed up to $30 million to InterWest Partners X as a follow-on investment and $9 million in a sidecar fund being raised by Battery Ventures VIII.
Charterhouse Capital targets European companies valued between €400 million and €4 billion, while Clessidra is an Italian private equity firm headed by Claudio Sposito, the former chief executive of Fininvest, a holding company of Italian Prime Minister Silvio Berlusconi.
A spokesperson for the pension said in a statement the investments would be funded “from cash” as part of Pennsylvania’s “long-term investment plan.” All commitments are subject to negotiations. During the meeting, the pension board also approved retaining Rocaton Investment Advisors as the fund’s general investment consultant, with a new contract expected to run for five years.
In May, Pennsylvania, which represents more than 215,000 pension members, said the fund had reached its target allocation for the private equity and real estate asset classes, telling PERE the fund was now reinvesting capital that had matured from prior funds.