The $42.9B Nebraska Investment Council will increase exposure to lower-middle-market buyout funds in 2026, as it seeks out strategies that can outperform in “down, sideways, and late cycle markets.”
According to recent investment meeting materials, NIC has earmarked $250M to $375M in private equity pacing for commitments to five to 10 funds next year. Ticket sizes will range from $25M to $75M per allocation. The pension plan is also considering co-investments as a strategy to “average down fees per dollar deployed and as an alpha source,” while selectively increasing exposure to Europe.
Private equity has a target allocation of 5% and is currently overallocated at 5.9%. The fund plans to gradually increase its commitment to $410M by 2034, noted the materials.
“PE investment activity has declined for three consecutive years since the peak in 2021, but total deal activity in 2024 was similar to pre-COVID levels and consistent with its 10-year average,” said meeting materials by consultant Aksia. “While still uncertain, we anticipate the total deal activity in 2025 will be materially influenced by macroeconomic conditions in the U.S. and global trade policies.”
Information technology, industrials, and health care remain the top sectors in the pension’s private equity portfolio. As of March 31, 2025, 70% of the PE exposure is in buyouts, broken down as follows: 14.7% in lower-middle-market, 72.9% in middle market, and 12.2% in large-cap buyouts. The portfolio also holds allocations to venture capital, growth equity, fund-of-funds, and special situations strategies.
Managers on the private equity roster include Genstar Capital Management LLC, HarbourVest Partners, and TJC LP, among others.
NIC’s private equity portfolio has outperformed the Dow Jones US Total Stock Market Total Return Index +3% over a 10-year period. It also beat its peer benchmark, Cambridge Associates, across the three-, five- and 10-year periods: 5.7% vs. 2.1%, 21.8% vs. 16.2%, and 16.3% vs. 13.1%, respectively.
Additionally, the Council disclosed a reduced allocation in its special situations strategy within its Health Care IPS and General Endowment portfolio, trimming the target from up to 35% down to 25%.
