Michigan Municipal Employees' Retirement System invested $300 million in the William Blair Dynamic Allocation Strategies Global Opportunity Fund.
Trustees of the $9.4 billion MERS approved the investment at their meeting May 13, said Jeb Burns, chief investment officer.
The William Blair fund uses a top-down global macro strategy to identify mean reversion valuation opportunities globally across multiple asset classes.
The Global Opportunity Fund was launched in 2009 and to date has managed $12 million of the firm's capital, said John Simmons, senior client relationship manager and strategist for the William Blair Dynamic Allocation Strategies team. MERS is the fund's first external investor, Mr. Simmons said.
“We selected this group because they understood that we wanted a true partnership,” Mr. Burns said, adding that MERS' investment team will benefit from having access to William Blair's proprietary research and market views.
Mr. Burns said the Global Opportunity Fund will be a core holding in the pension fund's global equity portfolio.
Separately, MERS is looking at directly investing in South American agricultural real estate. Mr. Burns said his internal team is looking for individual teams and experienced investment partners, although a formal search is not planned.
The size of the allocation to South American farmland has not been set, but it will be funded from MERS' $1.2 billion real assets allocation.
Other recent investment activity by the Lansing-based pension fund included an $80 million commitment to mining-related private equity in the Electrum Strategic Opportunities fund, managed by Electrum Group of Companies.
The pension fund's commodity portfolio accounts for 5% of plan assets and has been invested entirely in enhanced indexed strategies. Mr. Burns said the Electrum allocation is to an active commodity strategy, part of the pension fund's move to rejigger the commodities portfolio's active exposure to 4% of plan assets and the passive allocation to 1%.
“We are concentrating on finding high-beta inflation strategies,” through the switch to active commodities bets, Mr. Burns said.