Connecticut re-ups with revised Muller & Monroe diversity-focused fund-of-funds

  • Assets under management: $32.5 billion
  • PE portfolio: $2.9 billion
  • PE allocation: 8.9 pct
  • Whom to contact: David Barrett []
  • Why this is important: Muller & Monroe applies lessons from previous strategies to its new SMA

Connecticut re-upped with Muller & Monroe Asset Management in a fund focused on commitments in Connecticut-based women and minority managers that has a few new features. 

Treasurer Denise Nappier committed $50 million to Connecticut Private Horizons Fund managed as a separate account by Muller & Monroe.

The fund strategy differs significantly from previous funds Muller & Monroe manages for Connecticut. 

Muller & Monroe also manages the $105 million Connecticut Emerging Private Equity Fund of Funds and the $15 million CT Horizon Legacy Fund for the state.

Muller & Monroe’s expertise is investing in North-American small and lower-middle-market funds, and emerging and minority managers.

New characteristics of the Horizons fund include excluding early-stage venture and mezzanine investments, according to an investment report from StepStone Group presented to Connecticut’s investment advisory council.

Those strategies take longer to distribute to LPs, who are paying fees, which brings down overall returns, the report said. 

Muller & Monroe discontinued investments in small-business investment companies, which afford LPs less protection compared to non-SBIC vehicles, pension documents said.

Muller & Monroe also removed funds with high commodity risk given market conditions.

The manager will continue to target pools between $100 million and $500 million for the proposed fund; it will also evaluate funds up to $1 billion for wider manager selection.

The fund may also invest in international managers subject to Connecticut’s approval, documents said.

The new Horizon fund will invest in buyouts (40 percent-45 percent), growth equity (40 percent-45 percent) and special situations and other strategies (10 percent-20 percent).

Horizon will be invested in four to six fund managers over the three-year investment period. Underlying portfolio companies in these funds will have enterprise values of up to $250 million and diversified across industry.

Average commitment per deal will be $7 million to $10 million.

More than half of underlying fund managers will be minority- or women-owned.

Action Item: Read more on Monroe & Monroe here