PSERS Outsources $20 Billion to BNY Mellon as It Cashes Out $700 Million Trailer-Park Stake
Updated
Updated · The Philadelphia Inquirer · Jun 23
PSERS Outsources $20 Billion to BNY Mellon as It Cashes Out $700 Million Trailer-Park Stake
1 articles · Updated · The Philadelphia Inquirer · Jun 23
Summary
PSERS approved shifting $20 billion of internally managed assets to BNY Mellon in one of Pennsylvania’s biggest investment outsourcing moves, with $16 billion tied to an S&P 1500 stock index strategy and $4 billion to foreign stocks.
Falling index-fund fees and stronger benchmark-matching by outside managers drove the decision, CIO Benjamin Cotton said; BNY’s published institutional index fees of 0.2% to 0.7% imply at least $32 million a year before any large-client discount.
No staff layoffs are planned, with portfolio traders to be reassigned, though State Sen. Katie Muth cast the lone dissent over limited fee disclosure in PSERS contracts.
$700 million is also being returned to PSERS from the sale of part of its Yes Communities manufactured-housing investment, lifting total proceeds on a $230 million commitment to about $1 billion while another $500 million remains invested.
The board still approved two new private-market funds, but it held back from two private-credit deals as PSERS reviews weak results and inconsistent valuations across that portfolio.