Michigan commits more than $770 mln in Q2

  • $61 bln pension commits $238 mln to European funds
  • Backs VC funds for $435 mln
  • Commits $100 mln to Oaktree Capital funds

The $61 billion retirement system committed $125 million to Kohlberg Kravis Roberts & Co’s latest European buyout fund. KKR had raised $2.4 billion for that fund as of April, Global Head of Capital & Asset Management Scott Nuttall said during the firm’s first quarter earnings call.

Michigan allocated another 100 million euros ($112.8 million) to Rh?ne Group’s fifth flagship fund.

The retirement system also committed $100 million to Oaktree Capital Management’s latest family of distressed opportunities funds. The firm will invest the smaller of the two vehicles, the $3 billion OCM Opportunities Fund X, first. Once that fund is 80 percent invested, or the market for distressed investments improves, the firm will activate OCM Opportunities Fund Xb’s $7 billion pool of capital.

Michigan, which counts venture as a part of its $9.9 billion private equity portfolio, committed $435 million to venture capital funds during the second quarter, according to pension documents. The largest of those commitments – $250 million – went to FirstMark Capital P2, an investment fund managed by New York City-based venture capital firm FirstMark Capital.

In addition to its commitment to FirstMark, Michigan committed $150 million to Insight Venture Partners and $35 million to Flagship Ventures V. Insight had raised at least $2 billion for its ninth fund as of January, according to SEC filings. Flagship Ventures, which specializes in the healthcare and sustainability sectors, held a final close in late March on $537 million, according to a press release.

Michigan had a 16.1 percent allocation to private equity as of March 31, roughly 2 percentage points short of its 18 percent target, according to pension documents.

Approximately 56 percent of Michigan’s private equity portfolio is invested in buyout funds, with special situations vehicles accounting for another 18.6 percent and venture funds for 14.1 percent. The retirement system invested the remainder of its allocation in mezzanine funds, funds-of-funds and more liquid assets.