Pennsylvania Schools pension scheme to invest in insurance-linked securities

by Artemis on June 15, 2011

The Pennsylvania Public School Employees’ Retirement System, the public body that organises, manages and invests the retirement funds of public school employees in Pennsylvania, is to broaden their investment policy to include new asset classes according to Pensions & Investments.

They are said to have committed up to $1.07 billion to seven investment funds according to the report. The funds they have targeted include ones focused on real estate, private equity and loans.

As well as the more traditional investment fund classes they have also committed $250m to invest into the Palmetto Fund which is an insurance-linked securities fund managed by Nephila Capital.

Were the primary market for insurance-linked securities and catastrophe bonds more active we would expect to be seeing many more reports of large pension funds investing in the ILS and cat bond sector. We hear reports of frustrated investors unable to easily access the insurance-linked asset classes at the moment due to lack of capacity, something which bodes well for issuers later this year who may seek to upsize new transactions to take advantage of investor demand.

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