Oregon to bulk up alternative investment teams

The Oregon Investment Council, part of the Oregon State Treasury, is planning to hire three new investment officers within the next two years for its private equity, real estate and alternative investments asset classes, PERE's sister publication, Private Equity International, reported Thursday.

This comes as part of a new staffing strategy that will see the hiring of a total of 27 new positions in the Investment Division, which will take place primarily in the public investment space and bring total division staff to 66 positions, Oregon said in a statement on Wednesday.

While the rationale for the new positions on the public investment side was to reduce management costs by doing more internally, this is not the case on the private equity, real estate and other alternative asset classes.

Oregon will continue to rely on external advisors to manage its private equity, real estate and alternative investments, but considering the increasing complexity of these investments, it wanted to bulk up its team, which was very lean compared to peers, said James Sinks, a spokesman for the Oregon State Treasury.

Particularly on the alternative side, which includes non-correlated investments such as infrastructure, private credit, timberland and hedge funds, the new hires will help increase the current 6 percent actual allocation to its 12.5 percent target, which was set a few years ago.

“We're not moving in the direction of California,” said Sinks, referring to a push by the California Public Employees' Retirement System and the California State Teachers' Retirement System to increase direct investments in private equity. “We're still a pretty lean operation.”

The Oregon State Treasury manages the Oregon Public Employees Retirement Fund, the State Accident Insurance Fund, the Oregon Short Term Fund, and numerous smaller funds such as the Common School Fund and the Oregon Growth Account. Regarding OPERF, its largest fund, the Treasury invests under the direction of the Oregon Investment Committee.

The pension fund is the largest under Treasury management, totaling $73.6 billion as of June 30. It has a 19.3 percent allocation to private equity and 12.3 percent allocation to real estate, according to PEI data.