The Pennsylvania State Employees’ Retirement System (SERS) is making a sizeable shift within its public equities portfolio, moving approximately $2B to a passive U.S. equity strategy.
According to a SERS news release, the board recently approved amending its existing investment agreement with Philadelphia-based Xponance to liquidate assets from an actively managed international small-cap equity strategy and invest the capital into a passive U.S. equity strategy benchmarked to the Russell 3000 Index.
Philadelphia-based Xponance managed approximately $24.8B in assets under management as of March 31, 2026. Its Russell 3000 Index strategy managed about $2.1B over the same period, meaning SERS’ allocation will nearly double the assets in the strategy.
The board also approved a commitment of up to $150M to The Resolute Fund VII LP, establishing a new investment manager relationship for SERS. The fund, managed by New York-based middle-market buyout firm The Jordan Company (TJC), is targeting $8.5B in capital commitments with a $10.5B hard cap and is expected to hold a final close in November 2026. According to SERS investment staff and its private equity consultant, StepStone Group, the investment offers strong portfolio fit, differentiated sourcing capabilities, an experienced senior investment team and an operational value-creation strategy.
The commitment represents a 2026 vintage buyout allocation and is expected to increase SERS’ buyout exposure by roughly 0.9%. As of Dec. 31, 2025, SERS’ private equity portfolio allocated 57.8% to buyouts, 25.2% to special situations and 17.0% to growth investments.
Separately, the board received an update on a cost-of-living adjustment approved under Pennsylvania’s fiscal 2026-27 budget for retirees who retired on or before July 1, 2001.
The legislation, signed into law earlier this month, provides for the pension increase to be funded over the next 10 years.
“With the legislatively defined funding mechanism covering the cost over the next 10 years, there will be no increase to the employer contribution rate for this pension increase,” Executive Director Joseph Torta said in the release. “As fiduciaries to the SERS Fund, we will continue to monitor the funding closely and report to the board each year.”