Michigan Department of Treasury, Bureau of Investments, committed nearly $1.5 billion to private funds and co-investments on behalf of the $56.3 billion State of Michigan Retirement Systems, Lansing, in the quarter ended Dec. 31.
In a fourth-quarter 2014 investment report, the bureau revealed a total of $642 million was committed to nine private equity and venture capital funds:
- TPG Partners VII, $150 million;
- $150 million split between New Leaf Ventures III and New Leaf Growth Fund I, managed by New Leaf Venture Partners;
- $100 million each to Kelso Investment Associates IX, managed by Kelso & Co. , and FS Equity Partners VII, managed by Freeman Spogli;
- $50 million each to Khosla Ventures V and Public Pension Capital;
- Flagship Ventures Fund V, $22 million; and
- Advent Latin American Fund VI, managed by Advent International, $20 million.
Seven real estate and infrastructure funds were awarded commitments totaling $485 million:
- $100 million each to Invesco Mortgage Recovery Fund II and TPG Real Estate Finance Trust;
- Blackstone Energy Partners II, managed by Blackstone Group, $85 million;
- Lubert-Adler Real Estate Fund VII, $75 million;
- $50 million each to Orange Investors, managed by Heitman, and Paladin Realty Latin America Investors IV-CI, managed by Paladin Realty Advisors;
- Clarion Gables Multifamily Trust, managed by Clarion Partners, $25 million.
Four real return and opportunistic funds received commitments totaling $335 million during the three-months ended Dec. 31: The bureau allocated $100 million each to Apollo HK TMS Investment Holdings, managed by Apollo Global Management; KKR Lending Partners II; and Napier Park Aircraft Leasing Vehicle I, managed by Napier Park Global Capital. It also committed $35 million to Merit Energy Partners I, according to the investment report.
Separately, returns of the Michigan Public School Employees Retirement System, the largest of the four defined benefit plans managed by the investment bureau with $43.8 billion in assets, were 11.3% for the year ended Dec. 31; 13,4%, three years; 11.2%, five years; and 7.3% for 10 years. Returns of the fund's internal benchmark were 9.3%, 13.7%, 11.1% and 7%, respectively, for the same time periods.
Multiyear returns are annualized.