Wyoming Sets $600M For PE Separate Accounts

Investor: Wyoming Loan and Investment Board

Assets Managed: $16 Billion (June, 2012)

PE Assets Managed: $227 Million (June, 2012)

PE Allocation / Target: 2% / 4% (June, 2012)

Chief Investment Officer: Michael Walden-Newman

The Wyoming Loan and Investment Board, which oversees $16 billion in natural resource and land trust funds, has decided to increase its allocation to private equity to 4 percent by plowing $600 million over the next three to five years into separate managed accounts. The board, which is headed by Gov. Matt Mead and Treasurer Mark Gordon, also agreed to hire Hamilton Lane and Neuberger Berman, which will each manage $200 million separate accounts, according to Renny Mackay, the governor’s spokesman.

For the final $200 million of the new $600 million private equity allocation, Gordon and R.V. Kuhns and Associates, the state’s financial adviser, will seek a third separate account manager.

In 2003, the board committed $250 million to a private equity separate account managed by Cheyenne Capital, which claims to be the only private equity shop in Wyoming. The investment period for Cheyenne’s separate account with Wyoming is set to expire in September 2013.

Cheyenne didn’t meet the criteria established for new separate account managers, which stipulated that they oversee at least $2 billion. But Robert Grady, a Cheyenne managing director, told the Billings Gazette that his firm disagreed with the minimum asset requirement. “Bigger is not necessarily better,” he told the newspaper. “We would like to be considered because we believe our returns are superior.” Cheyenne said it plans to bid for the final $200 million separate account.

The Wyoming resource and land trusts are unrelated to the $7 billion Wyoming Retirement System, whose management is in disarray after the sudden firing of John Johnson, its chief investment officer, after he pleaded guilty to insider trading in March for an incident that occurred before he joined the pension system. In the meantime, Thom Williams, WRS’s executive director, also announced that he planned to step down, and will do so in August. He said he needed “spend more time with family and pursue other career opportunities.” A search for his replacement has begun.