PERS investment committee approves $75M TA Realty commitment, begins search to replace underperforming manager
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Summary
The committee approved a $75 million commitment to TA Realty Value‑add Fund XIV, accepted the manager watch list and authorized searches to replace one underperforming growth manager; multiple investment lineup decisions for Tier 5 were also approved.
The PERS Investment Committee voted on Aug. 23 to commit $75 million to TA Realty Value‑Add Real Estate Fund XIV and approved staff recommendations to accept the manager watch list and initiate searches for one underperforming U.S. growth manager.
Jason Clark, head of PERS private markets, presented staff’s recommendation and said the TA Realty relationship dates to Fund X and yields a consistent track record: “Of the 4 value funds Mississippi purchased with TA, all 4 have an IRR of over 10% with the latest fund 13 over 16,” Clark said. Staff recommended a $75,000,000 commitment to Fund XIV, citing expected sector weightings in industrial and residential, plus data‑center exposure through TA’s specialist group. The board approved the commitment by voice vote.
On public markets oversight, staff and the consultant outlined performance concerns for several growth managers. The committee placed Baillie Gifford on an active review path and authorized a formal search to replace the manager in the U.S. growth slot after recent underperformance. Ryan Holiday, presenting manager performance data, said the manager’s strategy had changed risk parameters and staff no longer expected prior levels of outperformance: “it’s time to initiate a search and see what else is out there,” Holiday told the committee. The committee accepted the watch list and approved the search criteria.
The board also approved several related actions: it accepted the staff recommendation that Tier 5’s DC investment line‑up match the existing MDC menu in order to reduce participant confusion and retain low fee structures; and the committee approved search criteria for the growth manager search.
Votes at a glance • $75,000,000 commitment to TA Realty Value‑Add Fund XIV — Approved by voice vote. • Accept manager watch list and initiate search to replace Baillie Gifford in U.S. growth slot — Approved by voice vote. • Approve Tier 5 DC investment lineup identical to MDC investment menu — Approved by voice vote. • Approve growth manager search criteria — Approved by voice vote.
Why it matters The TA Realty commitment expands PERS’s value‑add real estate exposure in sectors staff expects to benefit from regional population and GDP growth. The growth‑manager search and watch‑list actions show active manager oversight and an appetite to replace strategies that have materially changed style or risk profiles.
What’s next Staff will execute the TA Realty subscription, report pacing and investment draw schedules, and begin the manager search process; committee staff and the investment consultant will return with search‑stage materials and candidate recommendations in a future meeting.
