Small Massachusetts pension eyes increase to PE target

Plymouth County’s small size does not limit its interest in private equity as it eyes mid-market managers.

Plymouth County Retirement Association may increase its target allocation to private equity while also seeking to make commitments to small and mid-market managers.

Most smaller pensions have a smaller allocation to private equity. The $1.4 billion Massachusetts-based system stands out as private equity ranks as its second largest asset class, slightly trailing behind domestic public equity.

Plymouth County is considering hiking its private equity target to 15 percent, up from the existing target of 13 percent, according to a presentation made by consultant Meketa at the system’s March 26 board meeting.

The system is considering two options to an updated asset allocation mix, both of which include the 15 percent target to private equity, trailing only domestic public equity, the presentation said.

Both options would reduce the domestic public equity target to 21 percent from its current level of 25 percent, the presentation said.

Plymouth County would also begin investing in private credit under the proposed changes, starting with a 2 percent target allocation, according to Meketa.

According to Meketa, the system’s private equity portfolio currently has a NAV of $246.6 million, or 18 percent of its total fund. Domestic equities currently comprise 19 percent of the total fund.

Plymouth County also issued an RFP through Meketa looking to place a $10 million commitment to at least one North American small and mid-market buyout fund, with an April 12 deadline.

According to the RFP, the system will not consider first time funds, fund of funds or secondaries strategies.

Plymouth County announced it would make $30 million in commitments to three managers in FY 2024 at its July 2023 board meeting.

Plymouth County’s most recent private equity commitments were to Kohlberg Investors X, Waud Capital Partners VI, Trilantic Capital Partners VII and Atlantic Street Capital V, according to board documents.