MassPRIM backs HIG for up to $30m

The Massachusetts Pension Reserves Investment Management Board has finalised a commitment of up to $30 million to HIG Capital Partners V, according to investment committee materials.  

The commitment was not subject to a vote by MasssPRIM’s investment committee or board, according to a MassPRIM spokesperson.

HIG closed its fifth capital partners fund on $1 billion earlier this month. HIG Capital Partners IV, a $750 million 2006 vintage, had generated a 1.88x multiple and 39.8 percent net internal rate of return as of 31 March, 2012, according to University of California documents.  

Fund V will invest in lower mid-market businesses with a focus on those based in the US, according to a statement from the firm. 

“The new fund will allow us to continue our successful strategy of investing in privately-held companies and non-core subsidiaries of larger companies that present significant opportunities for earnings improvement and value creation,” HIG executive managing director Doug Berman said in a statement released at the time of the close.

In February, MassPRIM approved a 2013 strategic plan that calls for up to $1 billion in private equity commitments with $700 million to alternative fixed income strategies. The retirement system had set similar allocations with its 2012 strategic plan, though it ultimately committed only $736 million to private equity and $575 million to alternative fixed income, according to documents. 

The 2013 strategic plan also demands a continued focus on “core, strong performing manager relationships” along with more exposure to small/mid-market buyouts and emerging markets. MassPRIM also will continue to utilise its emerging manager programme, which targets investments in minority and women-owned firms, according to documents.