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MassPRIM bets on distressed, energy

The $41bn pension fund made commitments to Denham Capital, which recently hit the market with its sixth energy-related fund, and Avenue Capital’s second European fund.

The Massachusetts Pension Reserves Investment Management Board has committed up to $245 million to Avenue Europe Special Situations Fund II and Denham Commodity Partners Fund VI.

The $41 billion pension fund made a $145 million re-up to New York-based Avenue Capital’s second European distressed debt fund. The fund is targeting €1.5 billion for Northern European companies undergoing restructuring, reorganisation, bankruptcy or facing operational, industrial or financial difficulties. The general partner will commit 2 percent of capital to the fund, according to pension documents.

MassPRIM also committed up to $100 million to Boston-based private equity firm Denham, which is targeting $2.5 billion for its sixth commodities fund for investments in industries, companies and assets involving energy and commodities. The Fund will focus on the oil, gas, metals, mining, power and renewables sub-sectors,

A new asset allocation mix was adopted at the meeting. Private equity, which accounts for 10 percent of PRIM’s portfolio, was not affected.

The pension system’s executive director, Michael Trotsky, also bid farewell to MassPRIM’s head of private equity, Wayne Smith. Smith, whose resignation was effective as of 2 August, joined Pathway Capital Management.

As of 31 March, 2011, PRIM has committed over $12.4 billion to private equity, with $9.2 billion contributed and $8.3 billion distributed generating a net internal rate of return of 13.07 percent.