By David G. Barry

 

The State of
Rhode Island could soon have a new chief investment officer.

At a meeting of the State Investment Commission, Treasurer Seth Magaziner
said that a new CIO could be selected in “several weeks.” He said that he was
in the midst of interviews with a strong group of finalists.

Rhode Island is looking for a new CIO because Andrew Junkin is leaving
to become CIO of the $101.8 billion Virginia Retirement System (VRS). Its
current CIO, Ronald S. Schmitz, is retiring at the end of the year.
Junkin joined Rhode Island two years ago after being president of Wilshire
Consulting.

 

News about the
CIO selection process came as the state’s $10.5 billion Employees’
Retirement System of Rhode Island (ERSRI) received approval for what appears
to be its final private equity commitment of 2022.

The State Investment Commission approved an up-to-$30 million commitment in Paine
Schwartz Food Chain Fund VI, L.P. Paine Schwartz invests in middle market
buyout and growth equity transactions in the sustainable food chain and
agribusiness sectors. It also gave permission for ERSRI to use $15 million
which was allocated for co-investing alongside an earlier Paine Schwartz fund
to be used to co-invest alongside the new fund.

ERSRI has previously invested $80 million in two prior Paine Schwartz funds.

With the commitment to Paine Schwartz, ERSRI has now committed $290 million to 10
private equity funds for the 2022 vintage. Its pacing plan for the 2022 PE
vintage was supposed to be $200 million to $250 million to five to 10 funds. In
a memo to staff, the investment team said it does not anticipate additional PE
commitments for the 2022 vintage.

ERSRI’s private equity allocation was at 15% as of May 31. Its target for the
asset class is 12.5%.

ERSRI also
received the go-ahead to commit up to $30 million to Shamrock Capital
Content Fund III, which will primarily invest in the rights to participate
in cash flows generated by content. The fund will look to make between 10 and
20 investments across various media segments including film, television, music,
video games, and sports.

In 2020, ERSRI made a $20 million commitment to a prior Shamrock Capital
content fund, and also allocated $10 million to co-invest with that fund. ERSRI
had $5.98 million of uncalled capital remaining in the co-investment allocation
and will look to deploy that alongside the new fund.

 

ERSRI in 2021
also committed $30 million to another Shamrock fund, Shamrock Capital Growth
Fund V, L.P., which is a private equity fund and managed by a separate team.
The new fund commitment is being made out of ERSRI’s private credit portfolio. Its
target allocation for the asset class is 3% and as of May 31, it was at 2.8%.
The pacing plan for private credit is $170 million per year committed to two to
four funds. With the new Shamrock fund, ERSRI will have committed $80 million
to the 2022 vintage.