PRIM Investment Committee Approves Plan to Invest $1 Billion in Emerging-Diverse Managers
Move will Help Remove Barriers to Investment for Diverse Managers
BOSTON — The Massachusetts Pension Reserves Investment Management ("PRIM") Investment Committee provided preliminary approval to a plan that would invest up to $1 billion in emerging-diverse managers over the next two years.
The action comes as part of PRIM's Future Initiative aimed at implementing the newly created Investment Equity Law, which contains a goal of at least 20% diversity in PRIM's vendor base. If approved at the Board-level, five different firms, one for each asset designation, will help direct funds to emerging-diverse managers. This follows the allocation of $2 billion in 2021 to established diverse managers, including Rhumbline.
"The PRIM team, by investing $1 billion into its emerging-diverse managers program, is taking important steps in addressing the inequities endemic in the financial services sector," said State Treasurer Deborah Goldberg, who, as the Chair of PRIM's Board, advocated for the new law. "This is real and tangible progress that will reduce barriers and expand opportunities for diverse investment managers."
The manager of managers program will help reduce barriers to investment. The category of Emerging-Diverse Managers is modeled after PRIM's Emerging Manager Direct Hedge Fund Program and represents firms with less than $2 billion in assets under management and under three years of a track record.
"At PRIM we've made great progress on diversity and inclusion over the years. That said, this initiative, facilitated by the leadership of Treasurer Goldberg and the rigorous efforts of our staff, will position us to go the next level," said Michael Trotsky, CFA - Executive Director and Chief Investment Officer of PRIM. "I look forward to the energy and expertise these managers of managers will bring to this crucial effort."
The following firms have been designated to help source, conduct due diligence, source and monitor investment managers in their respective asset categories (funds will be recycled to ensure the program touches the greatest number of qualified managers):
Hamilton Lane for Private Equity — PRIM will leverage its almost 15-year relationship with the firm to ensure the effort aligns with PRIM's overall Private Equity program and fully utilizes Hamilton Lane's Diverse and Emerging Manager Program.
Bivium Capital for Fixed Income — With a relationship with PRIM since 2013, this diverse firm will utilize its expertise in investing in diverse and emerging managers to locate strong matches in this area.
Cambridge Associates for Real Estate — With its commitment to double the capital allocated to diverse managers to diverse managers, Cambridge will bring its real estate experience to find the best firms that suit PRIM's investment needs. (The Real Estate Committee will vote on Cambridge Associates tomorrow.)
Xponance, Inc. for Global Equities — This 100-percent employee-owned firm, 65% of whom are diverse and/or women will employ its multi-manager platform focused on emerging and diverse managers.
PAAMCO — This firm will continue to invest in emerging-diverse Hedge Fund managers for PRIM.
In July, PRIM hosted a National Association of Investment Companies roadshow of diverse managers to improve sourcing in this area. PRIM, via Lenox Park Solutions, distributed a survey of all DEI information for all of PRIM's existing investment managers and vendors in October.
The PRIM Board will vote on the Investment Committee's recommendation on December 2.
About Deborah B. Goldberg
Deborah B. Goldberg is the Massachusetts State Treasurer and Receiver General. In that role she is responsible for the state's cash and debt management, unclaimed property, and chairs state boards and commissions, including the Massachusetts School Building Authority, the Pension Reserves Investment Management Board, the State Board of Retirement, Massachusetts State Lottery Commission, and the Massachusetts Clean Water Trust. In 2015, she established the new Office of Economic Empowerment, the first of its kind in the country, and chairs its Economic Empowerment Trust Fund. Treasurer Goldberg also was elected to serve as President of the National Association of State Treasurers. Learn more at https://www.masstreasury.org/.
About The Massachusetts Pension Reserves Investment Management Board
The Massachusetts Pension Reserves Investment Management (PRIM) Board serves as a professional investment service for the retirement assets of Massachusetts teachers and many state and municipal employees. PRIM's mission is to provide a professional investment service for retirees that maximizes the return on investment within acceptable levels of risk and cost. PRIM broadly diversifies its investment portfolio, capitalizing on economies of scale to achieve cost-effective, high quality, innovative investment management strategies and results. Learn more at https://www.mapension.com/.