L.P. Minnesota Overhaul Includes Buyouts –

The Minnesota State Board of Investments late last year completed an overhaul of its $50 billion fund, including two new private equity mezzanine fund commitments as well as three follow-on alternative commitments. The fund terminated contracts with two underperformers, Investment Advisers of Minneapolis which according to the Nelson’s Institutional MarketPlace database was handling a $655 million fixed-income portfolio, and Record Treasury Management of Windsor, which according to the database was handling a $1.39 billion currency overlay portfolio. It was unclear if the fund is searching for manager replacements; calls placed to the executive director were not returned by press time.

In addition to the private equity hires, the board voted to hire three active fixed-income managers and four active international equity managers, according to minutes from the December meeting.

The private equity mezzanine fund commitments were awarded to Goldman Sachs Merchant Banking and DLJ Merchant Banking. The commitments, which were still being negotiated according to the meeting minutes, will likely be as much as $100 million and as much as $75 million, respectively. Incumbent alternative investment managers GTCR Golder Rauner, Fox Paine & Co. and Merit Energy were given additional allocations of as much as $175 million, $100 million and $100 million, respectively.

The new active fixed-income managers, who were hired following a search that was initiated in the fall, are Deutsche Asset Management, Dodge & Cox Investment Management and Metropolitan West Asset Management. Their portfolio sizes were not disclosed.

The new international equity managers, whose portfolio sizes also were not disclosed, are American Express Asset Management, Blairlogie Capital Management, Invesco Global Asset Management and Montgomery Asset Management.

The fund’s asset allocation mix, according to the database, is 50.7% domestic equities, 14.7% international equities, 27.5% fixed income, 2.1% real estate, 2.9% venture capital, 1.3% cash and 0.8% other.