MassPRIM allocates $725m across five managers, plots private equity consultant RFP

The Massachusetts Pension Reserves Investment Management Board (MassPRIM) in Boston approved numerous investment recommendations at its November 14 meeting, including $725 million in various alternative investment fund strategies.

Staff for the $77 billion PRIM fund and the investment committee recommended investments across credit, private equity, hedge fund, private equity and real estate portfolios.

At the same meeting, board members approved the issuance of an RFP for private equity consulting services as the contract with PRIM’s current private equity consultant Hamilton Lane expires in September 2020.

Also, last month, trustees unanimously approved the selection of consulting firm Albourne Partners to provide operational due diligence services for PRIM’s portfolio. The firm will be conducting on-site operational due diligence on all new investments as well as providing daily news monitoring and risk-based annual reviews for PRIM’s current manager line up.

The full board approved awarding LibreMax up to $200 million to manage in its Structured Credit Separately Managed Account. The firm, founded in 2010 by Greg Lippmann and Fred Brettschneider, has about $7.5 billion in assets under management.

The new separately managed account will invest across a diversified range of sectors and collateral types including consumer, residential, commercial, regulatory capital and CLOs. The strategy seeks to earn risk-adjusted returns by opportunistically investing across a broad range of higher yielding tradeable CUSIP and less liquid privately negotiated structured products in the U.S. and Europe.

Another $200 million mandate was awarded to real estate manager Divco for its U.S. growth real estate offering – DivcoWest Fund VI. PRIM staffers said that the fund was a attractive opportunity for the non-core real estate program as its focus is to invest in high quality assets, with value-add characteristics, located in markets with strong economies, skilled workforces and substantial tenant bases that will benefit from continued economic expansion and job growth.

The board of trustees also approved an allocation of up to $150 million to the Advent Vega Strategy Separately Managed Account, which is a convertible arbitrage strategy to be housed within the pension fund’s portfolio completion strategies program.

Advent’s strategy is a newer product for the New York-based hedge fund firm. It marries quantitative analysis with fundamental credit research to identify mispriced volatility or corporate events that could trigger higher volatility, according to MassPRIM staff.

Within the private equity portfolio, there was a new commitment of $75 million to the Toronto-based Georgian Partners. The investment will be in the Georgian Partners Growth Fund V, which targets growth equity stage investments in lower middle market software companies demonstrating efficient and predictable recurring revenue models. The fund is targeting $850 million in aggregate commitments. The Canadian firm was also approved for co-investment opportunities as well.

Another $100 million was committee to the TA Select Opportunities Fund that target middle-market growth companies in North America, Europe and Asia in technology, healthcare, financial services, consumer and business services sectors. For PRIM this is the sixth commitment to a TA Associates fund since 1997. TA Select is targeting roughly $1 billion in aggregate commitments.

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