Maryland State Retirement & Pension System, Baltimore, is partnering with Barings to launch a $250 million real assets program with a focus on the lower-middle-market direct deals and emerging managers.
The collaboration includes a $50 million allocation dedicated exclusively to in-state investments and Maryland-based emerging managers, the $69.5 billion pension fund announced May 1.
The partnership’s Terrapin Middle Market Infrastructure Fund, a closed-end, fund of one, will focus on investments targeting lower-middle-market and middle-market opportunities across sectors such as energy transition, digital infrastructure, transportation and the circular economy. While the fund will focus primarily on North America, a modest allocation will be directed toward Europe, according to a news release.
A dedicated portion of the investment is reserved for Maryland-based infrastructure assets and managers. “This means our agency is not just investing in the broader market — we’re backing Maryland businesses and homegrown talent,” said Martin Noven, executive director of the pension fund, in the news release. “It’s a by-Marylanders, for-Marylanders approach that reflects our confidence in the state’s capabilities.”
The arrangement with Barings is especially meaningful because it's a fund of one, CIO Andrew Palmer, added in the release. “We're not in a pooled investment with multiple stakeholders who may have differing objectives,” Palmer said. “This is a focused, collaborative effort between SRPS and Barings, aligned on a common goal.”
Barings' diversified alternative equity group will manage the Terrapin fund.
Mina Pacheco Nazemi, head of Barings’ diversified alternative equity team, said the program is truly one of a kind. “SRPS is leading the way in infrastructure and real assets by building a strategy with intentionality — focused on generating strong returns while addressing key gaps in the market,” she said in the release. “Traditionally, most capital has flowed to the largest asset managers, but SRPS recognizes the growing opportunity and value in the small- and middle-market space. They should be commended for their forward-thinking and innovative approach to investment strategy.”
