MassPRIM backs TowerBrook for $100m

TowerBrook Investors IV has a $3.5bn hard-cap for investments through a variety of strategies, including distressed situations.

The Massachusetts Pension Reserves Investment Management Board approved a $100 million commitment to TowerBrook Investors IV at its meeting Tuesday, a spokesperson told Private Equity International. 

TowerBrook is targeting $3 billion, with a $3.5 billion hard-cap, for its latest vehicle, which will invest in leveraged buyouts, leveraged build ups and distressed situations, according to MassPRIM documents. 

“TowerBrook believes that the opportunity for attractive distressed investing will continue on account of the ongoing difficult global macro-economic outlook, coupled with increased availability of otherwise solid businesses that face problems primarily arising from over-leveraged balance sheets,” according to MassPRIM’s meeting materials. 

The firm will commit between $75 million to $250 million in equity per deal to companies with enterprise values between $300 million to $1 billion. The firm’s previous flagship fund was generating a 1.3x investment multiple and 19.4 percent net internal rate of return as of 30 June, according to California Public Employees’ Retirement System documents.

Prior to TowerBrook, MassPRIM had approved $531 million in commitments to private equity and venture capital funds in 2012, leaving approximately $470 million to be committed, according to its 2012 investment plan. 

“We are on schedule with our private equity investments,” MassPRIM executive director Michael Trotsky said in an September email. “[$1 billion] is a goal, not a commitment depending on opportunities and overall asset allocation trends.”

Trotsky was promoted by the board earlier this year to take on the role of chief investment officer in addition to his duties as executive director. 

The $50.6 billion pension system has experienced turnover in several key investment positions over the last two years. Trotsky’s predecessor at CIO, Stanley Mavromates left in May to take a similar role at consultant group Mercer. Michael Langdon, previously senior investment officer for private equity, left in 2011 to help launch Hermes GPE’s new Boston office. Wayne Smith, who had headed MassPRIM’s private equity portfolio, left last August to join fund of funds manager Pathway Capital Management

MassPRIM is still searching for a senior investment professional to oversee its private equity portfolio, the spokesperson said.