Vermont state pension funds commit $75m to HarbourVest
A HarbourVest Partners fund targeting Europe, Asia and emerging markets has received a $10 million commitment from the Vermont Pension Investment Committee (VPIC). It is part of a $75 million investment by the committee, which represents pension funds with $3.33 billion under management as of February 2012, in vehicles operated by HarbourVest.
In addition to the $10 million for HarbourVest HIPEP VII, $40 million will go to US-focused PE fund HabourVest Partners Fund IX and $25 million will go to secondaries vehicle HarbourVest Dover VIII. HarbourVest HIPEP VII is expected to begin its investment cycle at the end of 2012, Pensions & Investments reported, citing Stephen Rauh, chairman of VPIC.
The committee approved a 3% allocation to private equity fund-of-funds in March and HarbourVest beat J.P. Morgan Asset Management to win the mandate under an invitation-only search conducted by investment consultant NEPC.
The committee is responsible for the $1.39 billion Vermont State Retirement System (VSRS), the $1.53 billion State Teachers' Retirement System (VSTRS) and the $412 million Vermont Municipal Employees' Retirement System (VMERS). For the 12 months through December 2011, the three pension arms delivered returns of 2.3%, 2% and 2.3%, respectively.
VSRS had just $861,000 - or 0.1% of its total portfolio - invested in private equity at the end of 2011, but it has outperformed all other asset classes on a one- and two-year basis. The system had 48.1% of its assets in fixed income, 36.9% in equities, 4.8% in hedge funds, 4.4% in real estate, 1.9% in cash equivalents and 3.8% elsewhere.
VSTRS and VMERS had allocated nothing to private equity as of December 2011.
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