• Appointment part of broader restructuring
• Aims to better coordinate private, public investing
Oregon State Treasury’s long-time private equity guru, Jay Fewel, announced his intention to retire back in early December, and the industry has been anticipating who would rise to the helm of the state’s large and very mature program, sister news service peHUB reported.
The Treasury has now provided the answer, and it’s not as simple as replacing one person with another.
The investment staff were informed last week of an organizational restructuring that effective Feb. 1 will place John Hershey, senior investment officer in charge of the alternatives portfolio, into the newly-created role of director of alternative investments.
In this position, Hershey will be responsible for leading Oregon’s alternative, opportunistic, real estate and private equity strategies, according to an internal memo sent to staff on Jan 24 and seen by peHUB. Oregon’s state Treasurer’s office confirmed the memo.
The news comes a day after peHUB reported that the Oregon Public Employees Retirement Fund could commit up to $2.2 billion this year to private equity, citing a person with knowledge of the system.
Like many other systems, Oregon is working to concentrate its portfolio down to its top managers. The system has not sold big chunks of its private equity portfolio on the secondary market, like other large public systems, and it likely won’t be exploring that option any time soon, the person said. Instead, the system will allow its manager base to shrink through attrition, or the natural expiration of fund terms.
The system has appetite for venture capital, but only on an opportunistic basis – it doesn’t have a separate allocation to the asset class, but considers it part of the overall private equity program. Last year it committed $50 million to two Union Square Ventures funds – Union Square Ventures 2014 and Union Square Ventures 2014 Opportunities Fund.
At the Treasury, meanwhile, Hershey is not directly replacing Fewel, though he is assuming control of the private equity portfolio – along with other alternative strategies. He joined Oregon in 2008, prior to which he spent more than a year as a managing director at Hercules Technology Growth Capital, according to his LinkedIn profile.
Hershey’s team will include Tony Breault, senior investment officer for real estate; Sam Green, investment officer for private equity; Andy Hayes, investment officer for private equity; and Ben Mahon, who is shifting from the public equities side of the portfolio to the alternatives team, according to the memo.
As part of the organizational restructuring, Perrin Lim, senior investment officer for fixed income, will take on the new role of director of capital markets, also effective Feb. 1. Lim’s group will include Mike Viteri, senior investment officer for public equity; Karl Cheng, investment officer for public equity; Tom Lofton, investment officer for fixed income; and Garrett Cudahey, investment officer for fixed income.
Oregon Treasury believes the changes will lead to a more coordinated approach to investment staff’s activities in private and public equities, according to the memo.
“Given the consistent success we have long enjoyed with our allocations to private equity, real estate and public equity, John and Perrin are inheriting a particularly effective group of investment professionals and practices,” John Skjervem, chief investment officer in the Treasurer’s office, said in the memo.
“I am confident that better collaboration in and among our private and public market efforts can improve our overall results and extend Oregon’s distinguished tradition of investment excellence.”
OPERS had $32.6 billion in committed capital, as of Sept. 30, 2013, with $29.7 billion contributed and $30.1 billion distributed. Its total value multiple stood at an overall 1.59x and its internal rate of return was 15.8 percent, according to information available on Oregon’s website.