Michigan commits to AlpInvest and Carlyle

The Municipal Employees’ Retirement System of Michigan has committed up to $750 million in private equity to Dutch fund of funds AlpInvest and Washington, DC-based private equity firm The Carlyle Group.

The state public retirement system committed $500 million to AlpInvest, which the firm will distribute across its fund of funds, secondary and co-investment strategies over a five-year period. MERS is AlpInvest’s first US limited partner.

The pension fund also committed up to $250 million in new capital to Carlyle, which will be distributed across its funds over the course of the investment period. Carlyle holds around $108 billion in assets under management across 84 funds as of 31 March. 

MERS holds around $6.5 billion in assets under management with a 7 percent allocation to private equity, according to its website.

Michigan’s commitment to AlpInvest is the €32 billion firm’s first since being acquired by Carlyle in January from Dutch pension funds APG and PPMG.

The diversification of Carlyle’s financial product portfolio has created greater fundraising opportunities for the firm, allowing it to market its traditional private equity and asset management platform along with those of its recent acquisitions, a source close to the firm told Private Equity International.

However, in the case of AlpInvest and Carlyle, a “high and fiery wall of independence” exists between the firms when it comes to their respective investment decisions, the source said. At the Dow Jones Limited Partner Summit in New York last month, Carlyle managing director Glenn Youngkin and Alpinvest chief executive officer and chairman Volkert Doekson said that they expect the firms to compete over future investment opportunities.

In June, Carlyle acquired a 55 percent stake in the Emerging Sovereign Group, an emerging markets equities firm. In December, the firm purchased a controlling interest in $4.5 billion credit hedge fund Claren Road Asset Management.