Private equity fan with a plan

A Maryland pension scheme is ‘in the market’ for new private equity commitments, finds Christopher Witkowsky

The man in charge of the $28 billion Maryland Retirement System is a private equity enthusiast, and has slowly and quietly directed the pension's investments toward the asset class since he arrived last April.

“I'm a big believer in private equity,” says Mansco Perry, the pension's chief investment officer. “Despite the market, this is a good time to invest.”

In September, the pension increased its target allocation to private equity from 5 percent to 15 percent. Maryland's actual current allocation to private equity stands at 3.5 percent, with about $951 million committed to private equity funds. Maryland also has an actual allocation of 6.8 percent to real estate, with a target of 10 percent.

HOW THE MARYLAND RETIREMENT SYSTEM PORTFOLIO BREAKS DOWN

Asset Class Market Value Actual Long-Term
($millions) Allocation* Policy Allocation
U.S. Equity 7,428.2 27.0%
International Equity 4,479.0 16.3%
Global Equity 2,419.8 8.8%
Total Public Equity 14,327.0 52.0% 37.0%
Private Equity 951.6 3.5% 15.0%
Absolute Return 732.4 2.7% 10.0%
Fixed Income 5,728.1 20.8% 15%
Real Return 1,324.4 4.8% 10%
Real Estate 1,885.7 6.8% 10%
Cash 2,608.4 9.5% 3%
Total Fund 27,557.7 100% 100%