Looking to further diversify its investment portfolio, the Connecticut Retirement and Trust Funds has carved out a new asset class that includes hedge funds, private debt, timber and possibly infrastructure. The state pension fund plans to commit up to 8%, or about $2 billion, of its $26 billion program to this new grouping of assets.
“We’re still getting our hands around it, but we needed some latitude to start to consider some of those asset classes and this was the easiest way to get that done,” says Jason Price, Connecticut’s private equity investment officer.
The LP has tapped New England Pension Consultant as the adviser. Connecticut already has active private equity and real estate programs, and Price says that the new asset class will not detract from those.
Connecticut has an overall private equity target allocation of 11 percent. Currently, about 6% of the portfolio, or $1.5 billion, is invested in the space. This year, the state will likely commit between $600 million and $700 million to private equity, a pace Price says will help the investor reach its 11% target allocation in a few years.
New general partners shouldn’t get their hopes up, though. “We’re mostly interested in re-upping with our existing managers,” Price says. “Our portfolio is maturing to the point where we’re happy with our existing managers.”
One area of interest is new mega-buyout funds. The LP is also actively searching for a chief investment officer to replace Susan Sweeney, who left last year.Among the VC firms that have received backing from Connecticut are BCI Partners, Great Hill Equity Partners, Highland Capital Partners, M/C Venture Partners, Mohr Davidow Ventures, Sierra Ventures and Syncom Management Co., according to Thomson Financial (publisher of VCJ). —Joshua Payne