Michigan Municipal Employees' Retirement System, Lansing, is investing more than $1 billion in three strategies.
The $6.8 billion system will invest up to $500 million with AlpInvest over five years in a combination of private equity funds, secondary and co-investments, and up to $250 million in Carlyle Group, one of the firm's first managed accounts, said Jeb Burns, the retirement fund's chief investment officer.
The Carlyle portfolio is opportunistic and also ends in five years, he said.
The system will also be entering into a strategic partnership with Carlyle and AlpInvest, which will offer global insights and strategic counsel, Mr. Burns said.
Carlyle Group bought AlpInvest from Dutch money managers APG and PGGM in a deal that closed July 1. However, Mr. Burns said the investments are separate and AlpInvest will not be investing in Carlyle funds.
Separately, Mr. Burns confirmed in an e-mail that the system also invested $350 million in Mellon Capital Management's Tangent-Added strategy.
The tactical asset allocation strategy seeks to outperform the S&P 500 by allocating to U.S. stocks, Treasury bonds and cash and uses leverage to achieve a maximum long exposure of 150%, according to a news release from Mellon Capital. The approach has a risk profile comparable to an equity portfolio.
Funding for the Mellon hire comes from a reduction of the fund's existing passive and active equity managers, Mr. Burns said.