PSERS announces pacing information for 2021

The Harrisburg-based public pension has announced its private debt pacing plan for the rest of 2021.

Institution: Pennsylvania Public School Employees’ Retirement System
Headquarters: Harrisburg, US
AUM: $69.60 billion
Allocation to private debt: 7.8%

Pennsylvania Public School Employees’ Retirement System has revealed its private credit fund pacing plan for the rest of 2021, according to materials from the pension’s October 2021 investment advisory council meeting.

Highlights from Pennsylvania Public School Employees’ Retirement System’s October 2021 investment advisory council meeting:

  • PSERS has outlined its private debt pacing range for FY 2021, with capital of between $875 million and $1.075 billion hoping to be committed by the end of the year. However, a contact at the organisation informed Private Debt Investor that they expect to miss this pacing target by $114 million.
  • The pension has also outlined a projected $760 million in commitments to be made across four private debt vehicles, which will be formalised later on this year. These will mark the first investments into the asset class in 2021.
  • According to materials, this targeted range of committed capital to private debt will allow PSERS to maintain its 8 percent target allocation to the asset class over time. The PSERS board approved a reduction of private credit asset allocation from 10 percent to 8 percent in November 2020. Pennsylvania currently allocates 7.8 percent of its full investment portfolio to private credit.

Pennsylvania’s private debt commitments since 2019 have been vastly global in nature, largely comprising mezzanine and distressed debt strategies in the corporate sector. Average ticket sizes have fluctuated between $100 million and $200 million, with peak commitments of $200 million made to both Sixth Street Fundamental Strategies Partners and Bain Capital Distressed & Special Situations 2019.

Other recent private debt commitments confirmed by PSERS include $125 million to Sixth Street Specialty Lending Europe II and $150 million to Carlyle‘s SASOF V.

Charles Spiller has been the deputy CIO at PSERS since January 2016, assisting the CIO by planning, managing and evaluating a wide range of investment strategies supporting PSERS’ investment programme. He also participates in development of asset allocation recommendations and oversees the alternative asset programmes, including responsibility for the private debt portfolio which represents around $5.5 billion of exposure across multiple debt strategies.

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