Merced System Picks PE Lineup

Merced County Retirement System has hired Adams Street Partners, Invesco Private Capital and Pomona Capital, to oversee the plan’s private equity portfolio. The trio will make the first private-equity investments for the $415 million Merced system.

Adams Street Partners and Pomona will each manage $5 million, while Invesco will oversee $10 million, says Richard Stensrud, CIO of Merced.

The system picked the three from an RFP shortlist that also included Hamilton Lane and The Crossroad Group.

The system has allocated 5% of the total fund to the newly implemented private equity portfolio, which will include buyout and venture capital investments. The impetus of the search followed an asset-liability study conducted by Buck Consultants and Milliman U.S.A.

Stensrud said that the system entered into private equity with the hope of achieving higher returns to help meet the plan’s actuarial requirements and offset forcing increased contribution from the plan’s membership.

The Merced system could suffer from a current statewide $38 billion budget shortfall in the future.