Orange County Employees Retirement System, Santa Ana, Calif., committed €35 million ($37 million) to H.I.G. Europe Middle Market LBO Fund and terminated $68 million from open-end property fund Jamestown Premier Property Fund, according to agenda materials from the $17.3 billion pension fund's March 25 meeting.
The H.I.G. Capital fund will focus on investing in underperforming European middle-market companies. The fund has a €2 billion fundraising target. OCERS' private equity consultant TorreyCove Capital Partners assisted.
OCERS also terminated Jamestown Premier Property Fund, an open-end, core-plus real estate fund managed by Jamestown. The pension fund originally invested $75 million in the fund in July 2015 and redeemed $20 million in March 2018. OCERS officials decided to issue a full redemption because the fund invests primarily in office (66.8% of the fund) and retail (25.4% of the fund) and does not align with the pension fund's sector objectives of its real estate portfolio, according to a staff memo. OCERS is aiming to increase exposure to industrial and apartments and reduce office and retail. OCERS' real estate consultant Townsend Group assisted.
Separately, OCERS is expected to consider whether to select a new asset allocation at its April 22 meeting. In the meantime, the OCERS staff will suspend forced rebalancing in the event there is a breach of the asset class ranges until the conclusion of the asset allocation study in light of the recent global markets upheaval resulting from the coronavirus crisis, according to another memo to the investment committee, the memo said. OCERS CIO Molly A. Murphy may recommend dynamic or tactical rebalancing strategies "if appropriate and prudent," the memo said.