Wyoming Retirement System, Cheyenne, disclosed investments and commitments totaling $112 million.
Within its marketable alternatives asset class, the $10.5 billion pension fund's staff disclosed an investment of $50 million in the Sprott Physical Uranium Trust.
WRS' investment in the commodity ETF was completed Oct. 18, said Sam Masoudi, chief investment officer, at the pension fund's board meeting Wednesday, a video of the meeting shows.
The exchange-traded fund is managed by Sprott Asset Management. A presentation to the board shown in the video said a supply-and-demand imbalance after a 10-year bear market has presented an "asymmetric investment opportunity for higher uranium spot prices."
"Until this price level is reached and sustained, demand for uranium will continue to outstrip supply, which should cause prices to increase. The potential upside to reach market equilibrium is quite significant with decent odds of a price overshoot," the presentation said. "Renewable energy, primarily wind and solar, are not stable sources of power generation and are causing disruptions to the energy market as countries transition their power grids."
The presentation added: "Nuclear power is a clean and reliable energy source that can meet the goals for climate initiatives and ESG considerations, two factors that serve as additional tailwinds for uranium. In a market environment with low yields in fixed income, high valuations in equities, and excessive dry powder in private markets, uranium is an attractive investment with positive skew and structural drivers unrelated to broader markets."
The presentation in the video shows the pension fund allocated the investment, its first in uranium, to its marketable alternatives asset class. The relatively modest size of the investment, which comes to a little less than 0.5% of the pension fund's total portfolio, is due to WRS staff's expectation that volatility will be high.
As of Nov. 5, WRS' actual allocation to marketable alternatives was 18.2%.
Also, the pension fund has completed four private equity commitments in the past several months, said Dan Paradis, senior investment analyst, in an email.
Those commitments were $20 million to Great Hill Equity Partners VIII, a buyout fund managed by Great Hill Partners; $15 million each to Clearlake Capital Partners VII, a private equity special situations and value fund managed by Clearlake Capital Group, and buyout fund Ridgemont Equity Partners IV; and $12 million to CapVest Equity Partners V, a buyout fund managed by CapVest Partners.
As of Nov. 5, WRS' actual allocation to total equity was 44.7%.
