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%.
