- Performance surpasses gains from 2011 and 2012
- Mass PRIM PE allocation 1 pct over target
- Pension fund’s overall performance up 15 pct
The performance exceeded the fund’s private equity returns of 15.8 percent in 2012 and 16.8 percent in 2011, according to Cosmo Macero Jr, a spokesman for Mass PRIM.
Already known for running one of the best-performing private equity portfolios among U.S. public pension funds, Mass PRIM finished out the year with $6.5 billion invested in the asset class.
The fund’s private equity allocation totaled about 11 percent, 1 percent above its long-term target, as of Nov. 30, according to the pension system.
All told, Mass PRIM’s total fund returned 15.2 percent in calendar year 2013 for an investment gain of $7.9 billion, bringing the total value of its retirement portfolio to $57.9 billion. The performance beat the fund’s benchmark of 12.6 percent.
“PRIM’s outstanding performance in 2013 will enable us to reduce our unfunded pension liability and is likely to increase the attractiveness of the Commonwealth’s bonds to investors,” Treasurer Steven Grossman said in a prepared statement.
Global equities delivered a return of 24.1 percent, while the system’s hedge fund portfolio increased by 12.6 percent and real estate rose by 10.8 percent.
Among its most recent moves into private equity, Mass PRIM late last year pledged up to $180 million to GTCR Fund XI and up to $100 million to American Securities Opportunities Fund III; it also committed $30 million to HIG Capital Partners V, $50 million to KPS Special Situations Fund IV, $30 million to WestView Capital Partners III, $25 million to Thoma Bravo Special Opportunities Fund I, $26 million to HIG Europe Capital Partners II, and $192 million to CVC Capital Partners VI.
Mass PRIM manages one of the best-performing private equity portfolios, according to an analysis of 14 of the largest institutional investors, Buyouts reported last September. The board generated a 4.2 percent bottom-quartile net IRR, 11.2 percent median net IRR and 20.0 percent top-quartile net IRR on its diversified private equity portfolio, which includes both buyout and venture capital funds, according to data from its most recent fiscal year.
Separately, Mass PRIM’s private equity portfolio placed first among 146 large institutional investors in performance based on 10-year and five-year annualized returns, according to a ranking by the Private Equity Growth Capital Council, released in October.
(This story had been updated to include private equity investment gains for Mass PRIM in 2011 and 2012).