Arizona SRS private equity head departs

Eric Glass, who oversaw the $40.4bn US pension’s private markets portfolio, has left to start a real estate investment firm, PEI has learned.

Arizona State Retirement System’s head of private markets has left the pension system, Private Equity International has learned.

Eric Glass, an almost 11-year veteran of the pension system who was senior portfolio manager, departed earlier this month, according to a source familiar with the matter.

Glass left to co-found Fortuitous Partners, a real estate investment firm that will invest in opportunity zones, according to his LinkedIn profile.

Glass joined Arizona SRS in 2008 and was responsible for a $27 billion portfolio that included public equity, private equity and real estate.

Karl Polen, the pension’s chief investment officer, will manage the portfolio in the interim before Glass’ position is filled, according to a source familiar with the pension system. Glass’ role is expected to be split up and the portfolio will be managed by more than one person, the source said. Internal and external candidates will be considered.

“Mr. Glass has been a very valuable member of the ASRS investment team for over 10 years and departed the ASRS as a full-time employee on 19 April to rejoin the private sector,” a spokesperson for the pension system told Private Equity International. “Mr. Glass will continue for a short time to work part-time for the ASRS to facilitate a smooth transition, and current members of the ASRS investment staff will be sharing in his former duties until a replacement is hired.”

Arizona’s PE portfolio

Arizona began investing in private equity in 2007, and the asset class accounted for 8.9 percent of its portfolio as of 30 June, according to a pension presentation dated 25 March. The pension system will invest up to $725 million in private equity this year; initiatives for the year include increasing co-investments, purchasing GP stakes in strategically important relationships and selling funds of non-core GP relationships.

The pension prefers to invest in GPs in their third fund or later and increasingly favours sector specialists and GPs with a discernible edge in areas like sourcing, operational capabilities and capital restructurings, the presentation noted. It also prefers to invest with managers who had a thoughtful succession plan and provided the opportunity to co-invest.

Arizona is underweight on venture capital, Europe and emerging markets, the presentation said.

Recent commitments by the pension include $100 million to K1 Investment Management’s K4 Private Investors fund and $75 million to The Jordan Company’s Resolute Fund IV, according to PEI Data.

Arizona’s $3.55 billion private equity portfolio returned 16.8 percent over one year, 14.48 percent over three years and 13.03 percent over five years as of 31 December, the presentation noted.