The Massachusetts Pension Reserves Investment Management Board is planning to spend $1 billion on private equity in 2010, though the $40 billion pension is comfortable falling short of its goal depending on the opportunities in the market.
“The target is only a guide in our annual plan,” Mike Travaglini, executive director of the pension, told PEO in an interview. “We had a $1.5 billion target for 2009 and made only $600 million in new commitments.”
The pension is “strategy agnostic”, Travaglini said, so it is not targeting any specific investment strategy. “We have a ‘bottom’s up’ approach to private equity investing, which is strategy agnostic, we’re looking for the best deals of the vintage year in the eyes of my staff and consultant,” he said.
Mass PRIM has not yet made a commitment to private equity. Its target to the asset class is 10 percent. The pension also has a 10 percent target to real estate, which is fully met at this point, Travaglini said.
Last year, the pension bought a secondaries interest in Denham Capital Management Commodity Management Partners V from Harvard for $150 million. The purchase was unique for Mass PRIM, which doesn’t invest in secondaries “as a rule”, so Travaglini doesn’t expect to do a similar transaction this year.
Mass PRIM committed to firms representing various strategies in 2009, including Gores Group, Oaktree Capital Management, Charlesbank Capital Partners and Xenon Private Equity.
As of 31 July, 2009, Mass PRIM’s alternatives portfolio was valued at $3.7 billion. The portfolio includes venture, buyouts, special situations, mezzanine and secondaries investments.