Maryland County To Commit $60M To $80M Next Year

The Montgomery County (Maryland) Employee Retirement Plans is aiming to commit $60 million to $80 million to private equity in 2011, as it climbs toward its target allocation to the asset class.

The current private equity allocation stands at 6.3 percent, well beneath the target allocation of 10 percent, said Portfolio Manager Bradley Stelzer.

During 2010, the $2.7 billion pension fund made one private equity commitment, a $10 million pledge to Mason Wells Buyout Fund III, said Stelzer. In 2009, the LP targeted a total commitment of $50 million to $70 million to private equity.

The pension started committing to private equity in 2003 to achieve higher returns than those available in the public equity markets.

About two-thirds of its private equity allocation is in buyout funds with the rest mostly in venture capital funds; a small amount is in special situations, distressed and mezzanine vehicles. The pension invests primarily through four fund-of-funds managers: Adams Street Partners; HarbourVest Partners; Landmark Partners; and Pomona Capital, as well as in Odyssey Investment Partners.

In 2008, the LP committed $30 million to Adams Street’s global vehicle and $25 million to Pomona Capital’s secondary fund.

Earlier this year the pension hired Wilshire Associates as its investment consultant.