Oregon Investment Council committed a combined $100 million to Sherpa Healthcare Partners Fund II, an early stage to growth stage private equity fund managed by Sherpa Healthcare Partners, and a sidecar, Rex Kim, CIO at the Oregon state treasury, reported at a council meeting.
Separately, the council, which oversees the $85.5 billion Oregon Public Employees Retirement Fund, Tigard, voted Wednesday to increase its private equity allocation by 2.5 percentage points to 20% and decrease public equity allocation by 2.5 percentage points to 30%.
OPERF's private equity portfolio has been above the upper end of its rebalancing range of 21% since the fourth quarter of 2018, a staff report said. As of March 31, the pension fund's private equity portfolio accounted for 24.1% of total assets. The council also increased the upper end of the private equity rebalancing range to 27.5% "in recognition of the difficulty of rebalancing illiquid assets, particularly through volatile market environments," the report said.
The council also divided its 15% allocation to what it called its alternatives portfolio into two separate asset allocations made up of the portfolios' two component parts. Oregon replaced its 15% allocation to its alternatives portfolio with a 7.5% allocation to real assets, which includes infrastructure and natural resources; and 7.5% to diversifying strategies, which include liquid funds with low equity market correlations, mainly long-short levered strategies trading public market securities.
The council made the change because the two sleeves of the alternatives allocation — real assets and diversifying strategies — are approaching maturity and scale, a staff report said. The two assets classes are dissimilar to each other, it said.
Staff and the council's general investment consultant, Meketa, plan to conduct a more in-depth asset liability study in 2022.