Peter Gilbert, the chief investment officer of the Pennsylvania State Employees’ Retirement System, has resigned from the pension fund and will take over as CIO for Lehigh University’s Endowment Fund later this summer.
Gilbert has been at SERS since 1993. In 2007, he was given a lifetime achievement award from Money Management Letter.
“We are grateful for all Peter has done to build SERS into one of the leading public pension funds in the nation,” SERS board chairman Nicholas Mailale said in a statement. “His departure is a great loss for SERS.”
At Lehigh, Gilbert will manage a much smaller pool of assets than he did while at SERS, which had approximately $32 billion (€25 billion) in its pension fund as of December 31, 2006. Lehigh’s Endowment is just over $1 billion. Yet Lehigh is making moves to establish a more professional staff to oversee its endowment. For the past 25 years, the fund was overseen by a volunteer subcommittee of the university’s board of trustees, according to a statement from Lehigh.
At Lehigh, Gilbert will no doubt look to replicate some of the performance generated during his tenure ate Pennsylvania SERS. In fiscal 2006, for example, the pension fund’s investments generated a return of 16.4 percent, including strong performances in alternative investments and real estate.
In a statement released earlier this year, Gilbert attributed the fund’s performance to “a broadly diversified portfolio that enabled us to capture strong returns in a range of asset classes, including real estate, up 17.6%; domestic stocks, up 18.8%; private equity, up 23.2%, and international stocks, up 26.8%.”
As of December 31, 2006, Pennsylvania SERS had $2.5 billion in its real estate portfolio, or approximately 7.9 percent of its total assets, compared to a target allocation of 8 percent. Approximately $1.8 billion was managed through separate accounts and $725 million in pooled funds. The pension fund has been a long-time investor in private equity real estate vehicles, committing to multiple funds managed by Blackstone, Lubert-Adler, Starwood Capital and Westbrook Partners, among others.
Since the beginning of the year, Pennsylvania SERS has made commitments to Blackstone’s latest real estate vehicle, Blackstone Real Estate Partners VI, and an Asian fund managed by Angelo Gordon.