MainePERS CIO Deliberates Withdrawal of PE Commitments

Effort seeks to ‘rebalance’ portfolio.

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.

Fund Name

Commitment

Total Distributions

Interim Net IRR

Alinda Infrastructure Fund II

$50m

$52.352m

4.25%

Brookfield Infrastructure Fund II

$100m

$32.947m

9.8%

Brookfield Infrastructure Fund III

$100M

10.781m

n/a

Carlyle Infrastructure Partners

$50m

$61.900m

2.7%

Cube Infrastructure

$44.845m

$23.239

7.5%

EQT Infrastructure III

$68.382

$3.270m

n/a

Global Infrastructure Partners

$75m

$145.478m

17.0%

Global Infrastructure Partners II

$75m

$89.109m

21.3%

Global Infrastructure Partners III

$150m

$6.108m

4.0%

First Reserve Energy Infrastructure Fund

$50m

$39.513m

3.5%

First Reserve Energy Infrastructure Fund II

$100m

$60.870m

43.99%

IFM Global Infrastructure Fund

$100m

$16.652

10.8%

KKR Infrastructure Fund

$75m

$55.854m

10.1%

KKR Global Infrastructure Investors II

$150m

$19.264m

10.5%

KKR Global Infrastructure Investors III

$100m

Meridiam Infrastructure

$11.211m

$3.878m

9.0%

 

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.

 

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