By David G.
Barry
The Massachusetts
Pension Reserves Investment Board (MassPRIM) has over the past three months
allocated more than a quarter of the $1 billion emerging-diverse manager program
it established earlier this year.
According to a report to the $92.4 billion fund’s investment committee by
Deputy Chief Investment Officer David M. Gurtz, a total of $260 million
has been allocated to date.
Through Xponance, MassPRIM allocated $100 million to four
emerging-diverse managers in May: Baynard Asset Management, which has an
international equity strategy; Frontier Global Partners, which also has
an international equity strategy; Fithian LLC, which has a global equity
strategy; and Redwood Investments, which has an international small-cap
strategy.
Through Bivium, MassPRIM in June allocated $100 million to three
emerging-diverse managers: Ducenta Squared Asset Management, GIA Partners,
LLC, and LM Capital Group.
Through Cambridge Associates, the pension plan committed $15 million in
June to Osso Capital and through Hamilton Lane in July, it
committed $15 million to Kinzie Capital Partners.
Additionally, MassPRIM in May committed $30 million to a fund from Insight
Partners that will invest in emerging-diverse venture funds.
The $1 billion program is part of MassPRIM’s efforts to meet its so-called
Future initiative, which seeks to substantially increase the allocation to
diverse and emerging managers to at least 20% of assets under management.
During the first half of 2022, PRIM allocated/committed more than $1 billion to
diverse managers. It also said that it will recommend the deployment of $750
million to three diverse investment managers during this board cycle.
PRIM also is seeking to diversify its international equity portfolio. The
plan’s staff is seeking to allocate $450 million to Columbia Threadneedle
Investments, $300 million to Causeway Capital Management and $250
million to Pzena Investment Management to provide active investment
management services for a World ex-U.S. Value equity mandate
.
The move, according to a memo by MassPRIM staff, will rebalance style exposures
between growth, value and core; reduce manager concentration risk; and enhance
the risk-return profile of the total International Equity portfolio. Currently
three managers comprise 83% of the total active International Equity portfolio.
The proposal was put before the investment committee and will be voted on by
the full MassPRIM board.
For the fiscal year ended June 30, MassPRIM had a gross return of -3%,
exceeding its benchmark return of -4.9%.
