Richmond Eyes Inaugural PE Investment

Richmond Retirement System may soon dip its toe into the private equity pool for the first time, most likely through funds of funds.

The $600 million pension fund, which administers retirement plans for police officers, firefighters and municipal employees in Virginia’s capital city, is nearing the end of an asset allocation study, administered by investment consultant Rogerscasey, that will likely recommend investments in private equity, a source with knowledge of the fund told Buyouts. “I do think there’s a decent chance we will increase our allocation to alternative investments and could invest in private equity,” our source said.

The limited partner has a target allocation to alternative assets of 5 percent, or $30 million; all of that has gone to funds-of-funds managers that invest in hedge funds. Depending on the outcome of the asset allocation study, the city could end up hiking the target allocation to 7 percent or even 10 percent, our source suggested, providing anywhere from $12 million to $30 million in fresh capital.

It’s unclear how much of the increase would be devoted to buyout funds. However, Richmond would most likely venture into private equity through buyout funds of funds vetted and recommended by Rogerscasey. The pension fund conducts an asset-allocation study every five years. The current one is slated to conclude by April.—J.P.