Tuesday, December 1, 2015

Pa. a center for mysterious investments

Two of the biggest private-equity investors: Hamilton Lane, PSERS

Pa. a center for mysterious investments


Two of the largest "active private equity fund investors" ranked by Private Equity International magazine are based in Pennsylvania.

#5 with $3.2 billion in PE funds (highest after the Canada, California and Washington state pension funds and Dutch pension manager APG) is the Pennsylvania Public School Employees' Retirement System, even though, as PEI reports, PSERS' recent private equity "performance has not been good," which is one of the reasons why Pa. school districts have been raising property taxes to cover the resulting shortfall in its pension assets.

So it's no surprise that PSERS has "started the process of trying to reduce its private equity exposure substantially -- from a 30 percent allocation to 16 percent" over the next ten years. (The Pa. State Employees' Retirement System is also a major buyout-fund investor, and its assets also falling behind its obligations, forcing a change in focus, though PEI failed to note this. The New Jersey state pension system, which until recently didn't believe in private equity, now has over $1 billion invested, according to PEI.) 

#7 with $2.3 billion in private equity funds is Hamiton Lane, a Bala Cynwyd firm that advises large pension funds in the U.S. and abroad where to invest their money. The firm yesterday said it has closed Hamilton Lane Secondary Fund III LP with $900 million in new funds, according to spokeswoman Katherine McGann. The firm won't comment on which pension funds have given it money to invest, or which buyout funds have been selected to re-invest the money, or how much they charge. Which doesn't seem to have worried investors, some of whom Hamilton Lane says it had to turn away.

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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