By David G. Barry
The Massachusetts Pension Reserves Investment Board (MassPRIM) has over the past three months allocated more than a quarter of the $1 billion emerging-diverse manager program it established earlier this year.
According to a report to the $92.4 billion fund’s investment committee by Deputy Chief Investment Officer David M. Gurtz, a total of $260 million has been allocated to date.
Through Xponance, MassPRIM allocated $100 million to four emerging-diverse managers in May: Baynard Asset Management, which has an international equity strategy; Frontier Global Partners, which also has an international equity strategy; Fithian LLC, which has a global equity strategy; and Redwood Investments, which has an international small-cap strategy.
Through Bivium, MassPRIM in June allocated $100 million to three emerging-diverse managers: Ducenta Squared Asset Management, GIA Partners, LLC, and LM Capital Group.
Through Cambridge Associates, the pension plan committed $15 million in June to Osso Capital and through Hamilton Lane in July, it committed $15 million to Kinzie Capital Partners.
Additionally, MassPRIM in May committed $30 million to a fund from Insight Partners that will invest in emerging-diverse venture funds.
The $1 billion program is part of MassPRIM’s efforts to meet its so-called Future initiative, which seeks to substantially increase the allocation to diverse and emerging managers to at least 20% of assets under management.
During the first half of 2022, PRIM allocated/committed more than $1 billion to diverse managers. It also said that it will recommend the deployment of $750 million to three diverse investment managers during this board cycle.
PRIM also is seeking to diversify its international equity portfolio. The plan’s staff is seeking to allocate $450 million to Columbia Threadneedle Investments, $300 million to Causeway Capital Management and $250 million to Pzena Investment Management to provide active investment management services for a World ex-U.S. Value equity mandate
The move, according to a memo by MassPRIM staff, will rebalance style exposures between growth, value and core; reduce manager concentration risk; and enhance the risk-return profile of the total International Equity portfolio. Currently three managers comprise 83% of the total active International Equity portfolio.
The proposal was put before the investment committee and will be voted on by the full MassPRIM board.
For the fiscal year ended June 30, MassPRIM had a gross return of -3%, exceeding its benchmark return of -4.9%.