Mississippi greenlights $600 mln for private equity

Public Employees’ Retirement System of Mississippi has another $600 million to invest in private equity funds, according to spokeswoman Shelley Powers.

Mississippi approved a $600 million allocation to GCM Grosvenor in February, Powers said, increasing the size of its private equity program by 15.6 percent.

Mississippi’s private equity program consists entirely of large, externally-managed separate accounts overseen by GCM Grosvenor and Pathway Capital Management. The system tapped Pathway to manage $950 million of private equity commitments in 2016.

The $29.1 billion retirement system has committed roughly $3.85 billion to the program since its formation in 2008.

Two previous accounts with GCM Grosvenor, marked as 2009 and 2014 vintages, include almost $1.4 billion of commitments across stakes in 71 partnerships, according to an investment summary provided by the retirement system.

The $750 million, 2009 vintage was netting a 14.72 percent internal rate of return, according to a Feb. 26 staff memo. A $700 million account formed in 2014 was netting a 4.53 percent IRR, though it’s still too early to draw any meaningful conclusions from its performance thus far.

The private equity portfolio was valued at a little more than $1.9 billion as of Jan. 31, according to a portfolio summary. The PE portfolio represented around 6.8 percent of the $29.1 billion retirement system’s total market value as of the same date, short of its 8 percent target allocation for the asset class.

Mississippi’s investment strategy calls for it to invest as much as three-quarters of its private equity program in traditional leveraged buyout strategies, with the remainder allocated to venture capital or special situations funds.

Mississippi’s private equity portfolio was delivering a five-year return of 16.18 percent, according to the retirement system’s most recent investment report.