NEWS

VRS in works to hike leverage policy target to 3%

By Muskan Arora

The Virginia Retirement System seeks to hike allocation to its infrastructure portfolio for leverage options, as it continues to hike weights to its fixed income, credit and cash portfolio.

For the $118.4bn pension plan, leverage has successfully been running since January 2024, as it plans to now explore centralizing data.

The portfolio continues to decrease its allocation to public equity.

“Both the program and benchmark have a lower absolute volatility than the capitalization weighted broad market to provide less downside risk to the plan,” as stated in the recent meeting materials.

Within public equity, which has a current allocation of 32.7%, the pension has most exposure to global large cap strategy, followed by global low vol.


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In the last month, the meeting materials revealed that the pension plan terminated Orchard Liquid Credit Fund, a long volatility credit hedge fund which sits within the portfolio’s diversifying strategies bucket and Nitorum, a long/short equity hedge fund which sits within the public equity portfolio.  

The pension plan hired seven real assets managers, five private equity managers and three credit strategies managers.

Within real assets, the plan allocated up to $200M to QuadCP Fund II, $125M to Artemis Income & Growth Fund II, $50M to Artemis Income & Growth Fund II Separate Account, $200M to Taurus Mining Royalty Fund, $150M to Silver Creek Aggregate Reserves Fund I, $100M to PetroCap Partners Fund IV and $250M to Hamilton Lane VA Real Estate SMA.

The pension plan allocates 12.6% or $14.9bn to its real assets’ portfolio against a target allocation of 14%, as of March 25.

Within private equity, the VRS allocated up to $100M to Harbourvest Co-Investment Fund VI, $200M to Peak Rock Capital IV, $75M to GTCR Strategic Growth Fund II, $225M to Bain Capital XIV and $153M to CVC Strategic Opportunities III.

The pension plan allocates 16.1% or $19.1bn to its private equity portfolio against a target of 16%, as of March 25.

Within its credit strategies portfolio, the pension plan allocated up to $200M to Audax Direct Lending Solutions III, $275M to Ares Special Opportunities Fund III and $200M to HPS Asset Value III.

The pension plan allocates 16.1% or $19.1bn to its credit strategies portfolio, against a target of 15%, as of March 25.