Michigan Department of Treasury, Bureau of Investments, disclosed $1.7 billion in first-quarter commitments on behalf of the $87.7 billion Michigan Retirement Systems, East Lansing, according to documents from its meeting Thursday.
In private equity, the bureau committed $200 million to HarbourVest Partners Co-Investment Fund VI. In 2020 it committed $100 million to HarbourVest Direct Lending Fund (L), a commingled fund that provides senior secured loans to lower middle- and middle-market companies primarily in the U.S.
The bureau committed $150 million each to Barings and GCM Grosvenor to manage the Michigan Small Emerging Manager Program, which was announced in February and aims to expand access to capital for emerging small private-market investment managers. Over the next few years, Barings and GCM Grosvenor will look for emerging, small private market investment managers that meet the target criteria, conduct thorough diligence, negotiate market terms, provide capital to managers and manage the portfolio, according to a news release.
Other private equity commitments include: $150 million to Berkshire Fund X, a middle-market buyout fund managed by Berkshire Partners; $100 million to Charlesbank Equity Fund X, a middle-market buyout fund, and $50 million to Charlesbank Equity Overage Fund X, both managed by Charlesbank Capital Partners; $50 million to Insight Partners Fund X Follow-On Fund, a growth equity fund — Michigan previously made commitments to Insight Venture Partners IX, X and XI; $50 million to Khosla Ventures VII, an early stage venture technology fund; $25 million to Khosla Ventures Opportunity I, a growth stage venture fund; $5 million to Khosla Ventures Seed E, a seed stage venture fund; and two $25 million commitments to funds managed by 5AM Ventures — 5AM Opportunities II, a late-stage venture health-care fund, and $ 5AM Ventures VII, an early stage venture healthcare fund.
In real return and opportunistic, the bureau committed $150 million to Blackstone Capital Opportunities Fund IV and $37.5 million to Blackstone COF IV Co-Investment Fund, comingled funds managed by Blackstone Group that are focused on upper-middle market, performing companies, according to board documents. It also committed $75 million to Turning Rock Fund II, a comingled fund managed by Turning Rock Partners focused on North American, lower middle-market businesses, providing transitional capital for special situations and structured securities, and made a $250 million follow-on commitment to Axton Holdings, a separately managed account that acquires publishing and copyrights. The bureau committed $210 million to Axton in 2020.
In absolute return, Michigan made a $100 million seed investment to Kayne Anderson BDC, a direct lending strategy managed by Kayne Anderson Capital Advisors focused on high quality middle market loans.
And in real estate, the bureau committed $75 million to BentallGreenOak US Cold Storage, a closed-end vehicle investing in the U.S. cold storage industrial sector, and $35 million to ISO III SMRS Sidecar, a co-investment into a European industrial platform alongside Invesco Strategic Opportunities III, managed by Invesco Advisers.
As of March 31, the Michigan Retirement Systems' actual allocation was 23.3% domestic equity, 20.6% private equity, 17.2% international equity, 12.7% real return and opportunistic strategies, 10.9% fixed income, 7.2% real estate and infrastructure, 4.4% absolute return and the rest short-term investments.