In brief: PennSERS halts fund commitment amid DE&I discussion

At the previous investment committee meeting, the board voted to make the commitment, despite accusations the firm had misled the pension on diversity efforts.

Following a debate at the Pennsylvania State Employees’ Retirement System about a particular GP’s DE&I credentials, the pension has decided to “indefinitely postpone” a $125 million commitment.

PennSERS’ board voted six to five to postpone the commitment to Sentinel Capital Partners’ funds, effectively overturning a recommendation the investment committee made earlier this month, reports affiliate publication Buyouts (subscription or registration required).

At the previous investment committee meeting, the board was divided on the relevance of diversity levels within the firm, but ultimately voted to make the investment. One board member said: “Our fiduciary duty is to our plan holders, to get the best return that we can for them, and that’s what we should be focusing on. Assuming our investment partners are not doing anything illegal, I don’t believe we should be injecting ourselves into their business operations and how they provide a very good return for us.”

PennSERS’ interaction with Sentinel is “the latest example of awkward interactions between investors and PE managers over the latter’s efforts on DE&I,” wrote affiliate title Private Equity International, “It likely won’t be the last.”