By David G. Barry
The Virginia
Retirement System (VRS) has had a busy past four months, committing $3.46
billion to 18 managers while terminating two who managed nearly $1.5 billion.
News of the new commitments came as the $101 billion system said it generated a
gain of 0.6% versus its benchmark of -5.5%. With that result, VRS joins a small
group of large public pension funds that were able to generate gains during the
2021-22 fiscal year.
According to a report presented at the August VRS Investment Advisory
Committee, $1.65 billion – or nearly half of the total committed – went to 11
private equity managers. It committed $200 million each to Advent
International GPE X, Apax XI, Audax Private Equity Fund VII and Apollo Investment
Fund X.
VRS’s smallest commitment was $40 million to the lone venture capital fund in
the group – Matrix Partners XII. VRS Chief Investment Officer Ronald
S. Schmitz told the board that VRS has moved away from venture capital over
the past decade as its looked to invest larger amounts of capital. Matrix, he
said, is a firm that it has long backed and helps – along with a few other
venture investments – to give VRS staff a view of the growth equity sector.
VRS also committed $175 million to Green Equity Investors IV; $150
million to Veritas Capital Fund VIII and HIG Advantage Buyout Fund
II; US$121.6 million to Bain Capital Europe VI; and $100 million to Thoma
Bravo XV and Vista Equity Partners Fund VIII.
Within private credit, VRS committed $450 million to both Magnetar
Diversified Credit and Värde Diversified Credit.
Within real assets, it deployed $675 million: $250 million to Blackstone
Real Estate Partners X, $200 million to EIG River Energy Partners,
$150 million to iCON Infrastructure Partners VI, LP and $75 million to True
Green Capital Fund IV.
On the public equities side, VRS said it hired CET Energy Dynamics Fund
for a $200 million commitment while terminating two funds run by Nordea,
totaling $1.47 million. VRS did not disclose a reason for terminating the two
Nordea funds.
VRS over the last four months also has brought aboard its next CIO: Andrew
Junkin, who has been the CIO of the State of Rhode Island. Schmitz
announced in November that he will be retiring at the end of 2022. He has been
CIO of VRS since 2011.
The system serves more than 750,000 active and inactive members, retirees and
beneficiaries.