The Massachusetts Pension Reserves Investment Management Board approved a private equity plan that allows for up to $700 million in private debt commitments, executive director and chief investment officer Michael Trotsky told Private Debt Investor.
The $57.9 billion pension system’s lone investment in private debt-related strategies in 2013 was a $100 million commitment to American Securities Opportunities Fund III, despite having set a $700 million allocation for private debt last year, according to investment documents.
“Our commitments to Private Debt are only goals, and not hard commitments,” Trotsky said. “[Last] year we came well short of our target … for private debt, largely because we didn’t see the opportunities there.”
“At this point, it’s pretty slow going, but if the opportunities present themselves we’ll be there.”
The pension system’s alternative fixed income portfolio generated a 19.6 percent one-year return last year, according to meeting materials made available to Private Debt Investor.
In addition to its private debt allocation, MassPRIM also approved up to $1.4 billion in commitments to private equity for 2014. The total is a significant increase over last year’s $1 billion allocation.