Hawaii Employees' Retirement System, Honolulu, committed $50 million to McMorgan Infrastructure Fund, confirmed Vijoy Chattergy, chief investment officer.
Mr. Chattergy said the infrastructure fund is a “feeder vehicle” into the Global Strategic Investment Alliance, a $10 billion consortium of investors, led by a $5 billion commitment from the C$60.9 billion (US$55.7 billion) Ontario Municipal Employees Retirement System, Toronto. The alliance is managed by Borealis Infrastructure, an investment arm of OMERS, which will conduct all the due diligence and negotiations on behalf of the alliance.
McMorgan & Co. is raising capital from U.S. institutional investors and will serve as fiduciary for the pension fund. It is the $12.9 billion pension plan's first infrastructure investment, part of its 5% allocation to real return.
Separately, the pension fund's board approved a tactical plan from private equity consultant Hamilton Lane to commit up to $250 million total to six to 10 private equity funds in 2014. Hamilton Lane will have “discretion in a box,” Mr. Chattergy said, which allows the firm to make discretionary commitments for the pension fund that follow specific guidelines and criteria. The tactical plan is expected to be in place for the next five years as the retirement system works up to its 7% target allocation in private equity from the current 3.8% level.
Also, the board voted to add a manager from the watch list and remove two others. Macquarie Funds Group was placed on watch for organizational changes. It manages about $25 million in a venture capital fund of funds for the pension plan.
The $642 million active domestic large-cap value equity strategy managed by C.S. McKee and $453 million active international equity portfolio managed by Mercator Asset Management were taken off watch because of improved performance.