Wyoming expects to roll out private equity

The $6.5bn retirement system will likely target an allocation between 3% and 7% for private equity, executive director Thomas Williams said.

The Wyoming Retirement System expects to launch its private equity programme by the first quarter of 2014, executive director Thomas Williams told Private Equity International

The $6.5 billion retirement system is in the process of developing a strategic plan for the asset class with pension consultant NEPC, Williams said. Wyoming’s board removed a restriction on private equity investment in February 2012. 

“We’re underway in terms of developing the strategic plan, but we’re not ready for implementation at this point,” Williams said, adding that Wyoming will set a relatively small allocation to private equity at first. 

“We’re going to be pretty small in the early years. We’re going to go for about 3 percent … 5 to 10 percent over time.”

We don't want to limit our opportunities in this space.

Thomas Williams

Wyoming’s investment policy caps the private equity allocation at 7 percent and limits commitments to less than 10 percent of an investment funds’ assets under management. The retirement system has not determined whether it will gain exposure to the asset class through direct commitments, funds of funds or a combination of the two, Williams said. 

“We can start with opportunities that are more accessible … in the developed markets, US being a part of that,” he said. “From a rollout perspective, that’s a sensible approach.”

“We don’t want to limit our opportunities in this space.” 

The retirement system became a subject of controversy last week after chief investment officer John Johnson was implicated in an insider trading scandal by the US Securities and Exchange Commission. Although the charges stem from events prior to Johnson’s employment at Wyoming, he has been placed under administrative review by the retirement system, Williams said. 

“It has not set the [private equity] process back because this is a longer term initiative. I think Mr. Johnson’s troubles have more of an effect in more immediate undertakings,” he said. “We don’t anticipate any longer term impact on our programme.”