Investors - JUNE 21, 2017

PSERS commits $200m to real assets fund

by Jody Barhanovich

The $52.7 billion Pennsylvania Public School Employees’ Retirement System has committed $200 million to Strategic Partners Real Assets II, according to press secretary Evelyn Williams.

Strategic Partners Real Assets II, managed by Blackstone Group, is a secondaries fund that focuses its invests in real assets. The fund is seeking to raise $1 billion in total equity commitments, according to news sources. The fund held an initial first close in the second quarter of 2017, according to materials presented to PSERS at a meeting in May.

The fund plans to continue the approach of its predecessor, Strategic Partners Real Assets, which seeks capital appreciation through the purchase of high-quality real assets from investors seeking liquidity prior to fund termination. Its portfolio will include utility, power generation, energy renewables, transportation, waste management, shipping, parking, and midstream and upstream energy industries, according to the meeting documents.

The majority of the fund’s investments will be in funds managed by North American, U.K. and western European managers, according to news sources. Strategic Partners is expected to begin investing in the second or third quarter of this year.

The documents suggest there is a growing supply of maturing real asset and infrastructure fund interests in the market due to investors wanting to exit older-vintage investments and shift to direct core assets. Strategic Partners expects this trend, along with divestment of noncore GP relationships, strategic and opportunistic sales from LPs, asset restructurings and liquidity needs, among others, to drive deal flow.

Two other secondaries firms have raised capital for infrastructure and real assets this year as well. Ardian was set to hold the final close on $1.7 billion for its sophomore infrastructure secondaries fund in May and HarbourVest Partners raised $366 million for a real assets secondaries fund in April.

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