New Hampshire sets $60m PE target

The $4.9bn retirement system is expected to increase its allocations to mezzanine and energy strategies as it continues to revive its private equity programme.

The New Hampshire Retirement System is poised to commit $60 million to private equity in 2012, spokesman Marty Karlon told Private Equity International. The $4.9 billion retirement system’s investment committee voted to approve a plan set by advisor NEPC at its 16 December meeting that would focus its allocations on energy, distressed, growth and mezzanine strategies.

While the retirement system is planning to commit $60 million to the asset class next year, it has banded that target between $40 million and $80 million.

The decision to allocate more commitments to mezzanine and energy focused funds is due in part to New Hampshire’s limited exposure to the strategies, according to NEPC’s report. The retirement system has no exposure to energy within its private equity portfolio and mezzanine funds make up only 3.3 percent of the portfolio’s exposure.

New Hampshire’s private equity portfolio is still in its growing stages. Despite being an active investor in the asset class since 1987, the retirement system made only a handful of commitments between 2000 and this year, when it committed $140 million across six funds. Recent commitments include $20 million each to Tennenbaum OF VI, Edgewater Funds Growth Capital Partners III, RFE Investment Partners VIII and SL Capital European Smaller Funds I.

NEPC also recommended that New Hampshire adopt allocation targets for specific private equity strategies within its portfolios, though it could not be confirmed if the retirement system voted on that suggestion at press time. The California Public Employees' Retirement System is also considering adding target allocation ranges for different types of private equity investments to its Alternative Investment Management Program, according to documents from the $235 billion pension.

As of 30 June, the retirement system had committed $723.7 million across 51 private equity funds in its history. Generally, the retirement system invests in venture and buyout funds, with smaller allocations to mezzanine and secondary funds, according to pension documents. New Hampshire has a 5 percent target allocation for the asset class.