Georgia rescinds placement agent ban

The state employees’ retirement system, which only became authorised to invest in private equity last year, is one step closer to making its first investment in the asset class.

The Employees’ Retirement System of Georgia has decided to allow the use of placement agents in its alternatives portfolio, a spokesperson for the pension fund told Private Equity International Monday.

Georgia Employees’ has been building its alternatives programme since April 2012 when the state’s governor, Nathan Deal, approved legislation that will allow the retirement system to invest up to 5 percent of its assets (1 percent of its assets annually) in alternatives. The legislation that made Georgia the last state to allow its pensions to invest in alternatives, went into effect on 1 July 2012, PEI previously wrote.

However, the system followed a policy that outright banned the use of placement agents. The system’s two alternatives officers, Ben Cahyono and Catharine Burkett, who joined in January, realised after months of meetings with GPs that many use placement agents, according to the spokesperson.

Banning the use of placement agents would limit the system’s ability to work with managers, the spokesperson told PEI.

The retirement system isn’t sure when it will enter the private equity market. There is no specific time frame though the spokesperson said the first investment may be made before the end of this calendar year.

Georgia Employees’ has $12.1 billion of assets under management as of 30 June, according to its website.