By Muskan Arora

The $110.5bn Massachusetts Pension Reserves
Investment Management is bullish towards venture capital, alongside an increasing appetite
for private equity.

The pension plan aims to allocate between
$2bn to $3bn to its private equity bucket in 2025, marking a hike from a $1.9bn
commitment last year.

Michael McGirr, director of private equity
at the fund, forecasts a recovery in dealmaking, despite the current volatility
including economic and geopolitical uncertainties.

Private equity holds 16.6% or $18.2bn of
the total fund.

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Within VC, MassPRIM will focus on smaller
and access-constrained managers, as it continues to build relationships with exciting
managers and plans to get new managers on the roster, as stated in the meeting
materials.

Venture capital makes up 9% of the private
equity portfolio, as the staff has begun their efforts to push into double
digits by the end of this year.

The private equity portfolio reported a net
return of 7.8% for the year ending December 31, 2024 and 17% as its 5-year
return.

Similar to California Public Employees’
Retirement System’s planned approach, the pension plan has signaled towards building
a ‘total portfolio approach’ at the pension plan.

The total portfolio approach discards
traditional strategic asset allocation methods of portfolio construction and
focuses on a more holistic approach which helps to eliminate silos between asset
classes.

CalPERS’ CIO Stephen Gilmore used this
approach in his former role as the head of NZ Super.