Gregg Gethard
'What happens if one of the managers decides to lay off 10% of staff of one of their investments? Can you imagine the headlines and pressure on us to step in and prevent that from happening,' says one board member.
The US impact firm is expanding into new asset classes while seeking up to $5bn for its fifth private equity fund.
Of the $424m MassPRIM committed to diverse managers last year, $158m went to four managers of venture capital and/or growth funds.
Many LPs are focusing on re-ups with existing relationships due to the current economic landscape. LPs with dedicated programmes may serve as a valuable lifeline for emerging and diverse-owned managers.
The nation’s largest pension system’s emerging manager commitment flies in the face of many other public allocators that have emphasised re-ups with existing relationships.
ESG and impact investing organisations are taking note as the US’s fourth biggest pension system acts against the movement.
Many states and regions lack the access to capital found in major metropolitan areas. In-state private equity programmes help bridge that gap while also providing returns for beneficiaries.
'Thinking of pension systems only in terms of the stock price return may have worked in 1945. But in 2025, it might not be that simple.'
LPs are starting to flex muscles regarding PE managers' commitment to diversity.
Several state pension funds have programs that use their capital to invest in local companies.
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