Allstate plans more co-investments; to hire staff

“We were out (of) the market for awhile and we’re back in it now,” Mayerfeld said. Allstate Investments has closed nine co-investments since December 2013, while others are pending. “We’re increasing the rate (of investment) at present.”

Mayerfeld, a former UBS managing director and private equity consultant, joined Allstate Investments in August to manage a $10 billion alternatives portfolio that includes private equity, infrastructure, real assets, real estate, and commercial mortgages. Mayerfeld reports to Chief Investment Officer Judith Greffin.

The insurance company’s investment arm also recently promoted Peter Keehn to managing director, responsible for managing the firm’s $3 billion private equity, infrastructure and real asset program. Keehn joined the alternatives team in 2003. (Ross Posner, who launched the infrastructure and real assets team in 2011, left to join Ridgewood Private Equity Partners earlier this year.) 

Allstate Investments had been an active co-investor early in Keehn’s tenure, but the insurance company lost its appetite for the strategy as transactions became more expensive in the years leading up to the global financial crisis.

The renewed focus on co-investments allows the insurance company to pay less in management fees, Keehn said. The strategy also allows Allstate Investments to better control the timing, size and management of its investments. Mayerfeld added that fund investments would continue to play an important role in the private equity program.

Allstate Investments will likely co-invest alongside both fund managers as well as independent sponsors that do not operate conventional funds, Keehn said.

To handle the additional work, Allstate Investments plans to hire more investment professionals with co-investment experience for both its U.S. and European investment teams, said Mayerfeld. The firm declined to be more specific on headcount.

“We have the talent today, but we need more of it because the volume’s increasing,” Mayerfeld said.

In December, Allstate Investments announced an emerging manager program designed to invest $100 million over the next three years. To qualify sponsors should have less than $500 million of assets under management and have raised fewer than three funds. At least 33 percent of the participating firms must be owned by women and/or minorities, with at least 50 percent of the carried interest going to women or minority staff.