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Michigan commits $335 mln to new PE, VC funds

  • Michigan inks two commitments with Axiom Asia
  • Retirement system also backs two new VC funds raised by Khosla
  • Michigan PE portfolio valued at roughly $11 bln

State of Michigan Retirement Systems committed $335 million to private equity and venture capital funds, according to a recent investment report.

Michigan split $100 million across a pair of vehicles being raised by Axiom Asia Private Capital.

The first $50 million allocation went to Axiom Asia V, a fund-of-funds targeting investments in Asia Pacific-focused private equity vehicles that had raised roughly $321 million as of mid-March. Michigan also committed $50 million to an Axiom Asia co-investment fund.

Axiom Asia closed Fund IV on a little more than $1 billion in early 2017, according to a press release.

The $70.6 billion retirement system also committed $85 million combined across two venture capital funds managed by Khosla Ventures. Most of that, $75 million, went to a Khosla Ventures VI, which is reportedly targeting $1.4 billion. Michigan allocated another $10 million to a seed-stage fund being raised by the firm.

The retirement system’s recent commitments also included $75 million each to Thoma Bravo’s $2.4 billion Discover Fund II and Trilantic Capital Partners’ latest flagship fund. Trilantic, which set a $2.25 billion target with $2.75 billion hard cap, is expected to hold a final close by the end of Q2, according to Pennsylvania Public School Employees’ Retirement System documents.

Michigan’s investment strategy skewed toward the mid-market in recent years as it sought to move away from its exposure to mega-buyout funds, according to the report. The retirement system is also concentrating its commitments with its existing managers and targeting new co-investment opportunities as well.

Michigan held roughly $11 billion of its assets in private equity as of March 31, according to its investment report. The portfolio generated a 10-year annualized return of 10.3 percent for the period ending March 31.

Action Item: To see Michigan’s most recent investment report, visit https://bit.ly/2lnlEzy