The Boston City Retirement System (BRS) is soliciting proposals from investment firms to manage a private markets mandate of around $100 million in aggregate commitments for a three years period, according to documents from its consultant, NECP.
The search will target private equity fund managers focused on, but not limited to, buyout, venture, growth and co-investments. In addition, the search will target managers that will complement the pension fund's existing private equity portfolio and exploit current market opportunities through a customised separate account structure.
As of February, BRS, which has $4 billion in assets under management, had an allocation to private equity of 5.2 percent with a target allocation of 7 percent. The pension fund has allocated commitments totaling $656.48 million in 70 private markets funds since inception in 1995. Of the 70 funds, 27 funds are in the investing stage, 20 funds are in the harvesting stage, 12 funds are in the liquidating stage, 10 funds have been completed and one fund has been sold on the secondaries market. Current investments include Lexington Capital Partners VIII, W Capital Partners II and Sterling Capital Partners III.
In order to be considered, the candidates must be raising a closed-end private markets fund with a final closing date no later than 31 August. Existing managers of the pension plan are encouraged to submit proposals.
Preference will be given to candidates that have at least five years of experience in providing separate account private equity management and have at least $750 million of committed capital in separate accounts. Managers submitting proposals must work with NEPC to conduct due diligence. Managers are expected to provide performance data for prior funds through 31 December 2015, according to the documents.
BCR's private market portfolio has a 10.7 percent exposure dedicated to buyouts, below its 25 percent target; a 14 percent exposure to growth equity, above its 10 percent target; and a 13.8 percent exposure to secondaries, below its 15 percent target. The pension is also overallocated to distressed and energy, with 22.3 percent and 9.5 percent allocations respectively, compared with targets of 10 percent and 5 percent respectively.
Boston City Retirement System is one of 106 contributory retirement systems that operate within the Commonwealth of Massachusetts.