Trustees of the Minnesota State Board of Investment, St. Paul, approved $1.55 billion in commitments to six new private market funds and an additional contribution to an existing fund managed by existing managers during a board meeting Wednesday.
The majority of commitments — $1.25 billion — from the state's $82.1 billion combined defined benefit plan fund went to private equity strategies.
Three private equity funds received $300 million each: Adams Street Global Secondary Fund 7; Hellman & Friedman Capital Partners X; and KKR Americas Fund XIII.
The Adams Street Partners fund's portfolio managers will invest in private equity secondary opportunities; the Hellman & Friedman fund's managers will invest in up to 15 large deals in the U.S. and Europe; and the KKR fund will seek North American buyout deals.
The board also approved smaller commitments to two private equity managers.
PPC Enterprises received an additional contribution $200 million commitment to its Public Pension Capital fund, which focuses on investments in middle-market companies in sectors including industrial, business and financial services, and health care. The board committed $100 million to the fund in December 2012 and contributed another $100 million in February 2017.
State Board of Investment staffers earmarked $150 million for investment in THL Fund IX Co-Investment Partners, managed by Thomas H. Lee Partners.
In the private credit asset class, $200 million was committed to Brookfield Real Estate Finance Fund VI. The fund's manager, Brookfield Asset Management, seeks mezzanine debt investments in the U.S.
The board also committed $100 million to Lubert-Adler Recovery Capital & Enhancement Strategy, which will seek opportunistic real-estate investments in the U.S.
Separately, the board released Dec. 31 performance of the combined defined benefit plans portfolio, which topped returns its benchmark in all periods reported by the board.
In the year ended Dec. 31, the portfolio returned 14.7% (benchmark, 13.7%); three years, 10.2% (9.8%); five years, 11.2% (11%); 10 years, 9.9% (9.6%); 20 years, 7.3% (7.1%); and 30 years, 9.3% (9%).
Multiyear returns are annualized.
The Minnesota State Board of Investment managed a total $114.4 billion as of Dec. 31, including $82.1 billion in defined benefit assets; $9.4 billion in participant-directed defined contribution plans; and the balance managed in other state funds, according to the board's website.
