Pension: Colorado Public Employees’ Retirement System
Assets Managed: $40 Billion (Oct. 18, 2012)
Private Equity Assets Managed: $3.6 Billion (June 30, 2012)
Private Equity Allocation (Target): 9.2% (7%)
Chief Investment Officer: Jennifer Paquette
Another state pension system has moved to bolster in-state economic activity by launching a special fund to target private equity and venture investments within the state’s boundaries. The latest effort is from the $40 billion Colorado Public Employees Retirement Association, which launched the Colorado Mile High Fund in October.
The fund, which is likely to earmark as much as $50 million to businesses that are based in or have a “nexus” in Colorado, will be managed by Credit Suisse Asset Management’s Customized Fund Group.
According to Colorado PERA, the fund’s strategy will be to invest the pension’s money in Colorado firms backed by private equity or venture sponsors and that are structured as co-investments.
“This is good for Colorado and for PERA,” said Jennifer Paquette, PERA’s chief investment officer, in a statement. “Colorado-based companies need an additional source of funding and, with the creation of the Colorado Mile High Fund, PERA will use our high investment standards to benefit our membership and Colorado’s economy,” she added.
As the economy continues to struggle, many state pensions have come under pressure from legislators and chambers of commerce to use their capital to boost their local economies. Dedicated in-state private equity programs have become a popular way to help achieve that goal.
Other pensions and endowments to form similar in-state private equity programs include the Indiana Public Retirement System, which last month announced the formation of a $150 million in-state program, and the Nevada Permanent School Fund, which chose Hamilton Lane to manage its $50 million Silver State Opportunity Fund. Other pensions that have committed to similar efforts include the California Public Employees Retirement System and the State of Wisconsin Investment Board.
Colorado has $3.6 billion in vested private equity and venture capital investments as of June 30. That amounts to a 9.2 percent allocation, which is above the system’s 7 percent target.
Colorado PERA provides retirement benefits to nearly 500,000 current and former Colorado state and local employees.