PSRS/PEERS Missouri Increases Private Equity Target

The Public School and Education Employee Retirement Systems of Missouri (PSRS/PEERS) has for the second time in two years increased its private equity asset allocation target.

After increasing the segment’s target to 16% from 12% in April 2020, the PSRS/PEERS board has now upped it to 21%, CIO Craig Husting told Markets Group. He did not elaborate on the move.
As of December 31, PSRS/PEERS had an actual allocation to private equity of 17%. In order to increase private equity by 5%, the systems voted to decrease Treasurys to 15% from 20%. In 2020, the board voted to increase Treasurys to 20% from 16%. As of December 31, it had an actual allocation of 13.8% to the sector.

PSRS/PEERS had assets under management of $59.5 billion as of December 31. The systems currently serve more than 128,000 active members and approximately 101,000 retirees. The new targets came about as part of an asset liability study that PSRS/PEERS conducted with Russell Investments. 
Private risk, which private equity falls under, is now at 40% – up from the 35% that it was increased to two years ago. The asset class also includes private real estate and private equity. Private real estate was at an actual 8.6% in December – close to its 9% target – and private credit was at 3.2% – above its 2% target.

Public risk, which includes U.S. public equity, credit bonds, hedged assets and non-U.S. public equity, is remaining at 45% – the level it was decreased to in April 2020.

At the board meeting, Husting said the PSRS/PEERS preliminary (unaudited) investment return for the fiscal year – July 1, 2021, through March 31 – was approximately 4%.