Minnesota State Board of Investment, St. Paul, on Tuesday approved committing a total of up to $500 million to three alternatives funds, subject to negotiation and final agreements, said Mansco Perry III, executive director.
The board, which oversees $68.6 billion in pension and other assets, committed up to $200 million to Energy & Minerals Group Fund III and up to $150 million each to secondary private equity funds Lexington Capital Partners VIII, managed by Lexington Partners, and Strategic Partners Fund VI.
Also, the board authorized negotiations with TIAA-CREF to serve as service provider of the $1.1 billion Minnesota College Savings Plan, St. Paul.
TIAA-CREF's current contract expires Aug. 31. The new contract with the state's 529 plan is for five years ending Aug. 31, 2019.
The 529 plan is jointly overseen by the state board of investment and the Minnesota Office of Higher Education. It has seven investment options, according to its website.
An RFP was issued late last year.
Separately, the board's $57.1 billion in combined pension funds returned 6.4% in the quarter ended Dec. 31 against 5.9% for its custom benchmark; and 20.2% for the calendar year compared with the benchmark's 18.4%.
Its domestic stock portfolio, comprising 48.3% of combined fund assets, had the highest return for both the quarter and year, with 10.2% and 35.1%, respectively. International stocks, with a 15.7% allocation, returned 5.5% for the quarter and 17.8% for the year; its 12.6% alternatives portfolio returned 5.6% and 15.8%, respectively; and its 21.2% bond allocation returned 0.1% and -1.3%, respectively. The combined funds also had 2.2% of assets in cash as of Dec. 31.