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Michigan Lowers PE Target But Still Has Millions For Pledges

Michigan’s Bureau of Investments, an arm of the Michigan Treasury Department that invests on behalf of the $45 billion State of Michigan Retirement Systems, has decided to reduce its target allocation to private equity to 14 percent from 16 percent. Even though the actual allocation to private equity is now about 21 percent, the limited partner still expects to commit $600 million to the asset class in the next 12 months, according to a spokesman.

The reason for lowering the private equity target was “long-term fund liquidity needs as well as further efforts to diversify the fund’s holdings,” the spokesman said. The LP has been “seeing a few opportunities in the debt area recently,” but expects “the buyout side to pick up as well,” he added.

A little more than half the alternative portfolio, as of June, was committed to buyout funds, almost 22 percent to special situation vehicles, almost 10 percent to venture capital funds and about 6 percent to funds of funds. The State of Michigan Retirement Systems also makes co-investments.

Michigan has previously backed Advent International, Glencoe Capital, Huron Capital Partners, The Riverside Company, Stockwell Capital (an adviser on co-investments) and Wind Point Partners.