The $96.6 billion Massachusetts Pension Reserves Investment Management board Tuesday approved a combined $575 million in alternatives allocations, with a focus on software, technology and distressed situations.
The board approved a commitment of up to $200 million to Blue Owl Capital's $5 billion Blue Owl Technology Finance II fund, which focuses on making senior secured loans to sponsor-based software companies.
The fund also invests in convertible bonds, preferred equity or common equity and can employ leverage of up to three times, but PRIM executives said at least in the initial stage of the mandate, PRIM's separately managed account will focus exclusively on senior secured loans and not use leverage.
New York-based Blue Owl reported assets under management of more than $140 billion as of March 31.
The board likewise approved an initial investment of up to $175 million in Oaktree Capital Management's $1.2 billion Value Opportunity Fund, a long/short strategy focused on stressed, distressed and value-oriented investments.
While the size of the fund disposes it to focus on mid-sized companies, PRIM executives noted that it can co-invest in bigger transactions sourced from other Oaktree funds as well.
Oaktree looks after $175 billion in client assets.
Finally, the board approved allocations to two funds sponsored by Insight Partners, an $82 billion, New York-based private equity firm focused on investments in growth-stage software and software-enabled businesses.
PRIM committed up to $150 million in the $10.6 billion Insight Partners XIII and up to $50 million in the firm's $1.9 billion Insight Partners XIII Growth Buyout Fund.
The board also approved the issuance of a request for proposals for managers of multiasset class credit investment strategies. Materials prepared for Tuesday's meeting said such a call for proposals "may allow PRIM to access strategies that are more nimble and invest across high yield and bank loans, as well as other securities in the below investment grade credit space, potentially resulting in improved risk-adjusted returns." No further details were provided.
