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$55B Virginia Retiree Fund Mandate Alts Continuation


With about $750 million in new allocations, the Virginia Retirement System (VRS) reported a thirst for non-traditional investments with a half dozen commitments gaining passage over the past three-month period.

Jeanne Chenault, the Richmond-based plan’s public relations director, said following its Feb. 14 Board of Trustees meeting that credit, real assets and private equity strategies received the green light.

Of the new investments, Chenault confirmed that credit investments were approved for New York-based Highbridge Capital Management and Chicago- and New York headquartered Golub Capital. For private equity, Quad-C, a Charlottesville, Va.-and New York manager, and Boston-based firms ABRY Partners and HarbourVest Partners were listed.

Also, New York headquartered Fortress Investment Group was tapped for real assets.

All commitments became effective between Dec. 7 and Feb. 1, the recap stated. Exact investments included $250 million and $150 million to Highbridge Principal Strategies and Golub Capital, respectively. Additionally $200 million went to the HarbourVest Co-Investment vehicle, $75 million to the Quad C VII fund, and about $24 million was allocated to the ABRY Senior Equity IV.

Lastly, $50 million was distributed to the Fortress Japan Opportunity Fund II.

Chenault explained Thursday that funding for the investment hires would be funneled from the VRS cash portfolio, which was valued at over $200 million cash portfolio.

Collectively, as of Dec. 31, the VRS had about 11.7% of its nearly $55.5 billion portfolio in credit-related investments. Also, 8.4% was allocated to real estate and 0.5% to other real assets. With regards to private equity, the VRS devoted 8.4% to the asset class.

According to its 2011 Comprehensive Annual Financial Report, VRS previously directed 8% to real assets, and 10% and 9% targets to each credit and private equity, respectively.

Previously, in December 2012, approximately $280 million were committed to alternative funds managed by Kohlberg Kravis Roberts & Co. (KKR) and ICV Capital Partners. According to the plan statement, about $250 million was directed to KKR Lending, a credit strategy. Also, $30 million was invested in the private equity vehicle, the ICV III fund.


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