The board of the Maine Public Employees Retirement System (MainePERS) recently approved a motion shepherded by Chief Investment Officer Andrew Sawyer to withdraw several of its commitments to private equity managers investing in infrastructure assets.
The decision was to redeem approximately five to six commitments to private infrastructure managers out of the approximately 13 relationships the pension plan has in the asset class, in an effort to “rebalanace” the portfolio. The remaining managers would be of the “highest conviction,” according to a memo prepared by the $14.1 billion retirement system
The selection of which managers to terminate relationships with is an “ongoing process,” Sawyer told CIO. He declined to comment further on the deliberation.
Sawyer and his staff recently approved a $150 million commitment to Global Infrastructure Partners IV, a $20 billion fundraising effort which likely will exclude the high-profile infrastructure manager from possible commitment redemption.
MainePERS’s infrastructure and energy portfolio is inclusive of the following, as of June 30, 2018.
Interim Net IRR
Alinda Infrastructure Fund II
Brookfield Infrastructure Fund II
Brookfield Infrastructure Fund III
Carlyle Infrastructure Partners
EQT Infrastructure III
Global Infrastructure Partners
Global Infrastructure Partners II
Global Infrastructure Partners III
First Reserve Energy Infrastructure Fund
First Reserve Energy Infrastructure Fund II
IFM Global Infrastructure Fund
KKR Infrastructure Fund
KKR Global Infrastructure Investors II
KKR Global Infrastructure Investors III
The memo did not disclose specific timing, manager selection, or other details. Penalties are traditionally imposed on investors who withdraw capital before the end of a private equity fund’s lifecycle, an effective deterrent for behavior that in aggregate could significantly impair a fund.