Minnesota State Board of Investment, St. Paul, on Sept. 14 approved hiring BlackRock to manage up to $1 billion in its long-term private capital fund, subject to successful contract negotiations, said Mansco Perry III, the board's executive director and chief investment officer.
The BlackRock strategy is an all-weather-type perpetual private equity investment vehicle with a $10 billion fundraising target that would own typically minority stakes in companies for a very long time, Mr. Perry said. The vehicle would be able to hold companies indefinitely rather than needing to find an exit when the fund nears the end of its lifespan, as with traditional private equity funds.
BlackRock had been looking for cornerstone investors in the fund, which hopes to replicate the successful strategy of Warren Buffett's Berkshire Hathaway, Mr. Perry said at a May 14 meeting of the board's investment advisory council, which recommended the hiring.
"BlackRock has made a niche for itself in sourcing deals," he said. "Plus, the economic model makes a lot more sense to an investor like MSBI."
The funding source has not been determined.
Minnesota State Board of Investment managed $96.2 billion in assets, including $68.3 billion for eight statewide retirement plans, as of June 30.