Massachusetts Pension Reserves Investment Management Board manages one of the best-performing private equity portfolios, according to an analysis of 14 of the largest institutional investors in the Buyouts returns database.
The board, which manages about $54 billion altogether, as of year-end had 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. From the limited information provided to Buyouts by the board it isn’t possible to say how much the board has committed to different kinds of funds. The board itself reports its private equity portfolio as a whole generating a return of 14.08 percent since inception gross of fees as of July 31.
What is clear: Massachusetts PRIM, which has been investing in private equity since at least 1978, and which as of July 31 had 11.3 percent of its assets invested in private equity, achieved especially impressive results on its buyout portfolio, defined to include both domestic and international buyout, growth equity and turnaround funds. For those funds the board generated bottom-quartile net IRR of 7.0 percent, median net IRR of 13.4 percent and top-quartile net IRR of 22.9 percent.
The board’s domestic and international venture capital portfolio did less well. Roughly a quarter of its venture funds have lost money, while the median net IRR is 7.3 percent and top-quartile net IRR is 12.5 percent.
Use the accompanying table to compare the performance of the Massachusetts PRIM portfolio with that of 13 other institutional investors. See p. 48 of the Sept. 2 edition of Buyouts for more details on our methodology.
Research intern Viraj K. Mehta contributed to this article