Each quarter State of Michigan Retirement System issues a Private Equity Review that provides a deep dive into the pension plan’s PE portfolio. In this article will highlight some of the major takeaways from the document and discuss why Market Lens users value the insights found in the review.

Real-time data on how pension plans are committing capital for private fund managers offers valuable insight into how the market is trending, what strategies are popular with investors, and which of their competitors are finding fundraising success.

While keeping tabs on recent commitment activity is valuable intel for GPs, forward-looking insights give fund managers actionable data points. Knowing the LPs with clear intentions to commit to their strategies can serve as the foundation for planning and executing a successful fundraise.

As US-based pension plans strive to put capital to work in the private markets, one area has increasingly come into focus as a destination for new commitments: their home states.

Historically, an overwhelming percentage of capital invested in private funds has flowed to companies located in a short list of states: places like California, Massachusetts, New York, Florida, and Texas.

In an effort to change this dynamic and stimulate their local economies, state pension plans are increasingly issuing RFPs for in-state investment programs.

Private fund managers often justify their fees by pointing to their track records and claiming that by investing in private companies they are delivering superior returns that are uncorrelated to public markets. But according to research from Vanguard using data from 1980 through 2012, only the top quartile of private equity returns have materially outperformed public markets.

Public market equivalent (PME) analysis gives context to a fund manager’s performance by comparing it against a public market index. It provides a more measurable, continuous benchmark compared to blind pool peer performance datasets.

On March 26, 2021, Callan met with their client North Dakota State Investment Board (SIB) to discuss the results of their In-State Private Markets Program manager search. The document covered in the meeting was among the most viewed in April by Market Lens users.