The Virginia Retirement System (VRS) recently reported a total of $3.2 billion in new allocations across credit strategies, private equity and real assets in between mid-April and mid-August.
The $101 billion pension fund placed the majority of fresh capital in private equity, which saw roughly half of the overall committed assets with investments totaling $1.6 billion. Credit saw $900 million in new commitments, while real assets saw allocations totaling $675 million over the last four months.
VRS reported a 0.6% return for the fiscal year 2022, with returns being led by strong private market gains.
“We registered a positive return by following VRS’ long-term strategy of diversification while taking advantage of strong private markets,” Chief Investment Officer Ronald Schmitz said in a statement. “Although the return was muted compared to last year’s banner 27.5%, the VRS total fund outperformed passively managed stock and bond indices by over 10%. In addition, we exceeded the assumed rate of return for the three-, five- and 10-year periods.”
Rhode Island CIO Andrew Junkin will join VRS as CIO next month in preparation for Schmitz’s retirement in January.
The $19 billion private equity portfolio led the way with a return of 27.4% for the 12 months ending June 30. Newly added private equity funds selected were: Matrix Partners XII ($40 million); Advent International GPE X ($200 million); Apax XI ($200 million); Audax Private Equity Fund VII ($200 million); Green Equity Investors IX ($175 million); Thoma Bravo XV ($100 million); Veritas Capital Fund VIII ($150 million); Apollo Investment Fund X ($200 million); HIG Advantage Buyout Fund II ($150 million); Vista Equity Partners Fund VIII ($100 million); and Bain Capital Europe VI ($122 million).
Credit strategies, meanwhile, account for $14.5 billion of VRS’ investment portfolio with new commitments going to Magnetar Diversified Credit Fund and Vӓrde Diversified Credit Fund each receiving commitments of $450 million. Both funds have a three-year drawdown period and invest opportunistically across credit markets with a focus on private credit investments.
Real assets were the second-best performing asset class at VRS over the past year with gains of 21.7%, trailing slightly the private equity program. The $15 billion real assets portfolio added four new funds as of late. They were: EIG River Energy Partners ($200 million); True Green Capital Fund IV ($75 million); iCon Infrastructure Partners VI ($150 million); and Blackstone Real Estate Partners X ($250 million).
