Oregon's small staff is one reason it has not done that many direct or co-investments, Mr. Skjervem said.
“We've done co-investments very selectively, very deliberately,” he said. “We have done some direct investment. We may do some more.”
At the same time, Oregon is taking steps to pull out the equity risk from its entire portfolio.
It took loans and high-yield investments out of its fixed-income portfolio and moved those strategies into its private equity portfolio.
The council also has been rolling back its private equity target allocation to 17.5% from 24%, starting in 2012.
“We are slowly but deliberately reducing private equity to 17.5%, but at the same time we are bringing down the roster of active relationships from 80 to 50 ... we had 300 investment portfolios and 80 active relationships with three people (to oversee it all),” Mr. Skjervem said.
Oregon now has 55 active private equity manager relationships. Oregon is also “writing bigger checks,” he said. The average commitment now is now $250 million, up from $75 million. Yet some of the state's bigger managers are getting smaller commitments than they had in the past — $500 million rather than $1.5 billion — while some smaller managers are getting a boost in commitments.
Oregon, along with Washington State Investment Board, is among the largest private equity investors, by percentage of assets, of large U.S. public pension funds, Pensions & Investments data show.
“We're delinking from the great state of Washington,” Mr. Skjervem said. “You guys are on your own ... We liberated a lot of equity risk.”
Oregon is also in the midst of restructuring its real estate portfolio to focus on core real estate by investing in open-end diversified funds and making select reinvestments with existing real estate managers. It is derisking its $1.7 billion value-added holdings, seeking selective separate accounts, while reducing its $2.3 billion opportunistic and $2.1 billion real estate investment trust sleeves.
Mr. Skjervem, who is fond of referring to the pension plan's portfolio as a rock band, said Oregon officials are returning real estate to its bass guitar role.
Both Messrs. Skjervem and Read noted treasury officials are moving toward measuring ESG factors as investment risks.
That move is part of the treasury's goal of improving its job of measuring the pension fund's long-term performance in a more comprehensive way, Mr. Read said.
The treasury has not had the capacity in the past to measure ESG factors on a total portfolio and asset class by asset class basis. Now, with Aladdin and the hoped-for extra staff — including a dedicated ESG investment officer — officials see that changing.