US pension fund pulls back private equity commitments

The fund's board decided to reduce its overall commitments to funds managed by Baring Private Equity Asia, Barings, Fairview Capital Partners and Greenspring Associates, to $63.5m from $79.5m, according to publicly available documents.

The decision was taken by the board following recommendation from its investment consultant Marquette Associates. The recommendation was partially due to the fact that "the private equity portion of the fund's portfolio is about 4% ($60m) overweight", a recent board meeting's minutes said. Marquette also anticipated "some write-downs in the portfolio, and that the liquidity will slow down dramatically for at least some time".

The pension fund committed $30m to Baring Private Equity Asia, $27.5m to Barings, $12m to Fairview Capital Partners and $10m to Greenspring Associates in February 2020. These commitments will be reduced to $24m, $22m, $9.5m and $8m, respectively.

Milwaukee County Employees' Retirement System is a $1.7bn pension fund. It currently has an allocation of 11.4% (amounting to $190.82m) to private equity, which is higher than the target set of 10% with an allowable range of 5-15%. The one-year, three-year and five-year returns were 11%, 14.5%, 10.9% respectively. Its net returns during the financial year came to 16.7%.

The pension fund issued two requests for proposals in 2019, one for a global diversified fund-of-funds manager and one for a small buyout fund-of-funds manager.

According to market sources, other American and European LPs are considering reducing their exposure to private equity, following the Covid-19 pandemic.

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• Topics
• LPs
• Fund-of-funds
• United States
• Baring Private Equity Partners
• coronavirus