Pennsylvania retirement system names new CIO

The Board of the Pennsylvania State Employees’ Retirement System (PA SERS) has approved the appointment of Bryan Lewis, who will join the public pension fund as chief investment officer in June.

In his current role of executive director of the $20 billion State Universities Retirement System, Champaign, Illinois, Lewis leads fund administration and investment management, including managing risk and compliance for two defined-benefit plans and one defined-contribution plan serving 220,000 members.

He succeeds Thomas Brier, who will retire on June 24. Brier, who has been with the public pension fund for the past 16 years, had served as deputy CIO since 2010 before being named CIO in December 2014.

“Bryan’s strong public pension experience and investment background stood out to the board,” PA SERS’ board chairman David Fillman said in a statement. “Like so many systems across the nation, SERS has been facing funding challenges while working to strike a balance between generating returns through all sorts of markets and being responsive to taxpayers’ desire for transparency.”

According to the statement, Lewis’ appointment is subject to successful salary and start date negotiations as well as any necessary approvals from the state of Pennsylvania.

PA SERS invests across a variety of asset classes including alternatives, hedge funds, fixed income and global public equity. Its real assets portfolio includes investments in energy, real estate, REITs, public infrastructure and commodities. As of 31 December 2015, the pension fund's private energy portfolio amounted to $162.3 million. However, funds in private energy are private equity-type investments in multiple sub-sectors of the energy market, a spokesperson for PA SERS told Infrastructure Investor.

In terms of private infrastructure, “[PA] SERS has two MLP managers which include investments in energy infrastructure,” the spokesperson said. “As of 12/31/2015, their values were $125 million with Harvest Fund Advisors and $107 million with Kayne Anderson.”

As of 31 December 2015, its market exposure to real assets stood at $3.6 billion, accounting for 13.9 percent of the fund’s $25.9 billion overall portfolio. However, of the $3.6 billion total, only $680.2 million is allocated to private real assets. PA SERS’ target allocation to real assets – both public and private – is 17 percent.

However, PA SERS' energy infrastructure investments are included in its fixed income portfolio – not real assets – “due to their current income profile,” according to the spokesperson.

Established in 1923 and headquartered in Harrisburg, PA SERS is one of the oldest and largest retirement plans for public employees in the US, with more than 236,000 members.