INVESTING/PORTFOLIO STRATEGIES

Kentucky Retirement Systems putting $390 million in real estate, private equity

Kentucky Retirement Systems, Frankfort, committed $390 million to five alternatives funds, confirmed David Peden, interim chief investment officer.

The $15 billion pension fund committed $120 million each to Prologis Targeted U.S. Logistics Fund and Stockbridge Smart Markets Fund. The Prologis fund focuses on industrial and warehouse properties; the Stockbridge Capital Group fund is a broader-based strategy that invests in core, value-added and opportunistic real estate, Mr. Peden said. KRS also committed $30 million to DivcoWest Fund IV, a value-added real estate fund, as it works toward reaching its 5% target allocation to real estate.

The pension fund also committed $70 million to Levine Leichtman Capital Partners V, a structured equity fund, and $50 million to New Mountain Partners IV, a middle-market buyout fund, managed by New Mountain Capital.

KRS invested in the two previous New Mountain funds; the other four managers are first-time commitments, Mr. Peden said.

Separately, the board approved creating the position of deputy CIO as well as adding two more investment divisions — real returns and real estate, and cash management.

The four current divisions are public equity, absolute- and real-return assets, fixed income and alternative assets. Each is led by a division director. The new division structure will be public equity, fixed income, absolute return, private equity and the two additions.

The new structure was approved, but an implementation process has not been decided yet, Mr. Peden said.