NEWS

SBCERA considers emerging sectors for new infra investments

By Muskan Arora

The growth of innovation technology and government policy has led the $4.32B Seattle City Employees Retirement System to consider emerging sectors within its infrastructure portfolio, in the current year.

The pension plan allocates 2.9% to its infrastructure bucket, against a target of 5%, as of December 31, 2024. The target allocation ranges from 2% to 8%.

Seattle is bullish towards middle market infrastructure funds due to its increased opportunity in the market, better exit opportunities and lower manager competition.

The recent meeting documents, presented by the consultant NEPC, state that, “middle market companies in the US are outpacing large caps in revenue growth.”

With an intention to grow the infrastructure portfolio, the plan has allocated up to $20M to Tiger Infrastructure Partners Fund IV.


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The fund is a continuation fund, with a focus on North America and Europe and will invest in communications, energy transition, and transportation sectors.

SCERS also committed up to $20M to Nova Infrastructure Partners Fund II, a middle market fund focused on digital communications, energy and energy transition, and transportation with additional opportunities in waste and water services sectors.

While the opportunity set seems very attractive, the consultant and staff continue to monitor challenges including pricing pressure, risks with infrastructure funds resembling private equity and sectors susceptible to scrutiny for environment environmental impacts or price gouging.

Within its infrastructure portfolio, the plan finds communication, midstream and transportation sector extremely attractive with a focus on investments in North America and Europe.

SCERS returned 8.7% net-of-fees for 2024, outperforming the strategic policy benchmark by 0.4%.

Last year, the pension plan committed up to $17.5M to GIP V, a global large-market infrastructure strategy and $20 million to Stonepeak Fund V, a North America-focused large-market infrastructure strategy.