MassPRIM considers $200m in re-ups

The $45bn retirement system, which allocated $1bn for private equity and venture capital in its 2011 investment plan, recently committed to KKR's mega-fund and Hony Capital's fifth fund.

The Massachusetts Pension Reserves Investment Management Board is considering a pair of big commitments to Providence Equity Partners Fund VII and Thoma Bravo Fund X at its meeting Tuesday.

The board, which had already committed $642 million to private equity this year, will consider commitments of $100 million each for the funds. MassPRIM has an existing relationship with both firms, according to retirement system documents.  

MassPRIM has been an active investor this year, setting aside $1 billion for private equity and venture capital investments in its 2011 investment plan. If the commitments to Providence and Thoma Bravo are approved, the $45 billion retirement system will have $40 million remaining to invest for its private equity and venture allocation for the year, according to Massachusetts documents.

Providence is targeting $6 billion on its seventh fund. Its predecessor, which raised $12 billion in 2007, is generating a net internal rate of return of 3.2 percent and 1.1x return multiple as of 31 March, according to the California Public Employees’ Retirement System.

In addition to typical private equity and venture capital investments, MassPRIM is also considering two commitments totaling $230 million for Crescent Mezzanine Partners Fund VI and GSO Capital Opportunities Fund II, both of which focus on mezzanine debt investments. Earlier this year, the retirement system committed $145 million to Avenue Europe Special Situations Fund II.

Last month, MassPRIM made $140 million in commitments across two private equity funds, KKR North American Fund XI and Hony Capital Fund V. The retirement system also adopted a policy that will allocate 5 to 10 percent of new commitments to emerging managers across all asset classes, Treasurer Steve Grossman told Private Equity International.