Commission also reinvests in Capula, gears up for secondaries
Rhode Island State Investment Commission, Providence, approved two new commitments of up to $110 million, with up to $30 million for Vinci Capital Partners III, a private equity investment focusing on a Brazilian middle-market buyout strategy that targets primarily consumer-related and industrial companies, and $80 million for the Heitman US Real Estate Focused Fund.
A presentation by investment consultant NEPC described the Heitman fund as a concentrated portfolio that seeks to identify security mispricings and targets greater active share and larger position sizes.
The commitments were made at the commission's meeting Wednesday, said Evan England, spokesman for state Treasurer Seth Magaziner. The treasurer oversees the commission, which manages the assets of the $8.3 billion Rhode Island Employees' Retirement System, Providence.
The commission also approved two recommendations by alternatives consultant Cliffwater. One is to rebalance the absolute return portfolio by reducing the total fund allocation back to a 6.5% target from 6.8%
The other approved recommendation was to reinvest a 15% mandatory redemption from Capula Global Relative Value fund into a new, less liquid share class, Class H, that provides quarterly redemptions with a 25% investor gate at the same fee level as the current share class, according to a Cliffwater memo presented at the Wednesday gathering.
At the same meeting, the commission approved a new policy allowing it to purchase secondary interests in LP fund commitments made through the inflation protection portfolio's private infrastructure asset class and the private growth portfolio, with the potential for up to 20% of exposure through secondaries in funds currently held. Funds that already include capacity for future secondaries would not require commission approval.
The current policy allocation is 8% for inflation protection and 15% for private growth.
According to meeting documents, the pace and type of secondary transactions would be opportunistic, but fall into four categories: existing portfolio funds, existing GPs but new funds, access to high quality GPs and opportunistic deep discount.
Mr. England said in an interview that the new policy of up to 20% exposure is not a hard target but that he expects decisions to be made soon.