The $25 billion Pennsylvania State Employees’ Retirement System (SERS) has committed a total of $300 million to two energy infrastructure funds. Both commitments are to increase Pennsylvania SERS’ exposure to energy infrastructure in the United States, which offers high total return opportunity and provides inflation protection, as outlined in Pennsylvania SERS’ 2012–13 Strategic Investment Plan.
Pennsylvania SERS invested $150 million each in energy funds managed by Harvest Fund Advisors and Kayne Anderson Capital Advisors.
Pennsylvania SERS’ 2012–13 Strategic Investment Plan for its real assets portfolio calls for it to generate real total return that exceeds inflation and to provide competitive total return over the long term through capital appreciation and income generation. Real assets include the pension fund’s investments that predominantly own or develop physical assets and that are highly correlated to inflation. Two categories of investments make up Pennsylvania SERS’ real assets class, real estate and inflation protection.
Real estate investments include core and noncore real estate and REITs. Inflation-protection investments include public and private energy, commodities, natural resources, timberland and farmland, and infrastructure.