Most Viewed Private Markets Activity – Public Plans – September 2018

October 25th, 2018

by Cameron Nicol, Senior Marketing Manager – eVestment Private Markets

1. Alaska Retirement Management Board, Real Assets Review and Strategic Plan, Sep 20th

In September 2018, Townsend presented a portfolio review and strategic plan for Alaska Retirement Management Board’s (ARMB) real assets allocation. Data as of June 30, 2018 reported ARMB’s real assets target as $4.4bn (17% of total plan). ARMB’s real estate portfolio was reported as $1.9bn, 42% of the real assets portfolio and above the 35% targeted allocation.

Based on the current portfolio performance and structure, Townsend outlined fiscal 2018 plans for ARMB’s real estate portfolio, with recommendations including a decrease of the Core Real Estate target allocation, an increased Non-Core Real Estate allocation and commitments, and an increase in REIT allocation to offset reduced liquidity from the increased Non-Core investments.

The Non-Core Real Estate appetite recommend by Townsend covers Value Add and Opportunistic funds, and offerings are “somewhat defensive in nature or structure (strong income/cash flow and pre-seeded portfolios).

2. Illinois Municipal Retirement Fund, Real Assets Investment Rescindment, Aug 23rd

While published in August, this document was one of the most viewed through September. The memo published by Illinois Municipal Retirement Fund (IMRF), outlines IMRF Staff’s decision to rescind a commitment of $150m to an Open-End Core Real Estate fund. The document cites that after further legal due diligence, a commitment the fund is not “in the best interest” of IMRF due to unfavourable legal terms of the investment.

3. Orange County Employees, Private Debt GP Client Presentation, Sep 6th

Private markets users were interested in gaining insight into their peers in September, with a presentation deck by a European Private Debt manager featuring in the most viewed documents.

In addition to an update on the status of funds OCERS are invested in, the deck provides an outline of the GP’s perspective on the debt market opportunity.

4. Teachers’ Retirement System of Louisiana, Private Equity Investment Recommendation and Commitment Pacing, Sep 6th

Hamilton Lane, consultant to Teachers’ Retirement System of Louisiana, put forward four new commitment recommendations in September which total $200m. The commitment amount is comprised of Thoma Bravo Fund XIII ($50m), Lindsay Goldberg V ($50m), Lone Star XI ($75m) and NGP Natural Resources XII ($25m).

The document contains full reviews for each fund and manager, including track records and outlining the recommendation rationale.

In addition to these investment recommendations, fiscal year 2019 commitment pacing was outlined at $1.0bn to $1.4bn across private markets, with $295m already approved or closed across six funds. The full document includes details for target ranges, expected number of fund commitments, and more.

5. State of Michigan Retirement Systems, Private Equity Strategic Plan, September 13th

State of Michigan Retirement Systems (SMRS) Investment Staff presented a review and strategic plan for the Private Equity portfolio at a September Investment Committee meeting.

Staff reported an $11bn private markets portfolio as of June 30, 2018, which is up from $9.6bn in 2017. While the portfolio has lagged SMRS’ PE benchmark over 3- through 10-yea periods, performance has been strong relative to peer median returns, featuring in the top 8% of peers over the last ten years, citing fund selection and strategy as drivers.

SMRS’ focus for the private equity portfolio over the next 12 months is centered on commitments to both new sponsors raising capital and existing sponsors raising successor funds. Strategies targeted will be a combination of buyout, venture capital, secondary and growth equity. Staff outline the intention to diversify portfolio exposure by tilting towards middle and lower market funds, with an appetite for co-investments to drive down costs.

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