PA Public Fund Beefs Up VC, Private Equity Holdings

September 15, 2003 (PLANSPONSOR.com) - Pennsylvania's State Retirement System is dipping its toe further into the venture capital and private equity pools.

The $22.1-billion public pension fund announced it was adding $109.5 million to its existing venture capital and private equity holdings, according to the Bloomberg News Service. The pension system, which provides retirement benefits to 207,000 current and former employees of Pennsylvania, had 3.3% of its money in venture capital and 8.4% in private equity funds as December 31.

The value of the pension fund’s private equity investments fell by 6.9% last year. Its 10-year annual return in private equity was 13.2% as of December 31, compared with a 9.2% return for the fund in domestic stocks. The fund’s venture capital investments fell 27% last year. It had annual returns of 14.6% in venture capital over the 10 years ended December 31.

The pension fund’s board voted Tuesday to invest $35 million in Cerberus Institutional Partners Series Three, a private equity fund, and $25 million in private equity fund LLR Equity Partners Fund II. Three venture capital fund groups also will receive more money. Namely:

  • $25 million¬†in the Three Arch Partners IV
  • $12.5 million in Charles River Partnership XII
  • $12 million in the Draper Triangle Ventures II Fund.

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