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Michigan slates $407 million to alternatives

Michigan Department of Treasury, Bureau of Investments, committed a total of $407 million to six new and one existing private investment strategies in the quarter ended Dec. 31 on behalf of the $56 billion Michigan Retirement Systems, East Lansing.

The bureau's Dec. 31 investment review showed the pension fund committed a total of $195 million to new strategies managed by three existing managers.

A $100 million commitment was earmarked for Veritas Capital Fund VI , a buyout fund that will invest in middle market companies providing goods and services to government entities.

Staff also committed $50 million to GSO COF II Co-Investment Fund, a companion fund to mezzanine specialist GSO Capital Opportunities Fund II in which the system has already invested. The funds are managed by GSO Capital Partners.

Warburg Pincus China Private Equity Fund received a $45 million commitment. The fund will invest alongside Warburg Pincus Private Equity XII, in which the Michigan Retirement Systems also is an investor. Warburg Pincus will invest 50% from each fund in Chinese companies in sectors including consumer, health care, real estate, financial services, and technology, media and telecommunications. The China fund is the 12th private equity fund managed by Warburg Pincus that the system has invested in or committed to.

MRS committed an additional $37 million to the $165 million already committed or invested in a separate account real estate strategy managed by Principal Real Estate Investors.

Asana Partners Fund I, a new manager for the Michigan system received a $25 million commitment for investment in street retail properties and neighborhood shopping centers in 11 U.S. metro areas including Raleigh and Charlotte, N.C.; Charleston, S.C.; Atlanta; Nashville, Tenn.; and Austin, Texas.

The fund made commitments to two new real return strategies managed by existing real estate and private equity manager TPG: $100 million was set aside for investment in TSSP Adjacent Opportunities Partners and $50 million to TICP CLO Partners II.

Separately, the Bureau of Investments reported the Dec. 31 returns of the $43.5 billion Michigan Public School Employees Retirement System as proxy for all four state retirement systems it manages: one year, 7.4% (benchmark, 10%); three years, 7.1% (7.1%);five years, 10% (10.6%); and 10 years, 5.9% (6%). Multiyear returns are annualized.