Indiana expects cost savings by upping co-investments

The $25bn pension fund, which had 13% in private equity as of 30 June, forecasts $500,000 in investment cost savings as a result of increased co-investments in the asset class.

The Indiana Public Retirement System expects to save half a million dollars for the 2017 fiscal year, which ends 30 June 2017, thanks to an increase in private equity co-investments.

INPRS, which had 13.3 percent of its total assets in private equity as of 30 June, listed its total investment expense forecast for the 2017 fiscal year as $177.8 million, according to its 4 May board meeting materials.

This was up slightly from the actual amount of $177.2 million incurred in the 2016 fiscal year ended 30 June for the $25 billion pension fund, but less than the $189.2 million it actually budgeted for the 2017 year. For the 2018 fiscal year, the pension has budgeted $207.9 million.

Planned expenses related to private equity for fiscal year 2017 were not available. According to its 2016 fiscal year report, INPRS spent $42.1 million in private equity management fees in fiscal year 2016, accounting for 26 percent of the total investment management fees incurred by the pension. In the same period, INPRS had relationships with 129 private equity fund managers, including Bain Capital Partners, CVC Capital Partners, Platinum Equity and Vista Equity Partners.

Of the anticipated amount spent in fiscal year 2017, there is a planned $500,000 savings thanks to an expansion of its private equity co-investment programme, the meeting materials said. The current size of INPRS’s private equity co-investment programme was not immediately available and it wasn’t clear how much more they plan to co-invest to reduce expenses.

The documents also added that INPRS is renegotiating fees with several managers, though they did not specify whether this was for just private equity or across asset classes.

The Indianapolis-based pension expects $3.6 million in spending across its overall portfolio for services including a new data collection fee this year.

As previously reported by Private Equity International, INPRS launched a recruiting process in March to hire an external consultant to audit its private equity, private credit and private real estate investment costs for its first time.

An INPRS spokeswoman was not available to comment on the co-investment programme and updates on the recruiting process.