MassPRIM Seeks Managers For In-State Program

The $42 billion Massachusetts Pension Reserves Investment Management Board has issued a request for proposals in its search for investment management services for its economically-targeted investment program, which includes both venture capital and buyout investments.

The MassPRIM board is looking for equity, fixed income, real estate and private equity proposals from firms looking to manage assets that are at least 50 percent invested in Massachusetts. Responses are due by 3:00 pm, EST, March 5, 2010, with a projected start date of July 1, 2010. All told in 2010, MassPRIM may commit up to $1 billion to buyout and related funds, and up to $500 million to alternative fixed income, which includes distressed debt, said Investment Analyst, Private Equity, Ryan Foscaldo.

The board adopted its economically-targeted investment policy in 2003, and as part of it MassPRIM seeks investment opportunities that will benefit the state’s economy and that are consistent with the board’s obligations to participating retirement systems. In total, the state has committed $270 million to build a portfolio of fixed income, real estate and alternative investments. In December, the board approved a $50 million slug to a Battery Ventures biotech fund, and a $25 million pledge to the health-care focused SV Life Sciences as part of the economically-targeted investment portfolio.

All told about 9.1 percent of MassPRIM’s assets are invested in private equity, just below a target allocation of 10 percent. About 89 percent of the private equity portfolio is dedicated to what the limited partner calls special equity. This category includes leveraged buyouts, growth buyouts, industry consolidations, special situations and subordinated debt. Venture capital comprises the rest of the private equity portfolio. MassPRIM has relationships with 75 private equity managers in all.

Hamilton Lane serves as the pension fund’s alternative investment consulting firm.