Colorado pension creates $126m ‘opportunity’ asset class

The Colorado Public Employees’ Retirement Association has created a new allocation bucket for investments that fall outside of its existing asset class definitions.

The Colorado Public Employees’ Retirement Association has created an “opportunity fund” for investments that fall outside of its definitions for existing asset classes, a spokeswoman for the $42 billion (€28 billion) pension fund said.

The new fund has a 3 percent allocation target, which became effective at the start of this year. To fill the allocation, the pension moved its current 1 percent timber allocation into the opportunity fund pool, and drew 2 percent from its domestic equities allocation.

The fund’s investment strategy has not yet been determined, but possibilities include 130/30 funds, a type of long-short equity fund, or commodities.

The new allocation was approved in November and became effective on 1 January. With the new opportunity fund in place, the pension now allocates 43 percent of its portfolio to domestic equity, 15 percent to international equity, 25 percent to fixed income, 7 percent to real estate and 7 percent to alternative investments.

The fund’s primary benchmark is the total public markets index, and its secondary benchmark will be an aggregation of individual strategy benchmarks.

The investment committee has not yet considered any new investments for the fund, the spokeswoman said.

CPERA is an active private equity investor, having committed to more than 138 funds. The firm committed $200 million to Warburg Pincus X last year, and has also recently made commitments to funds managed by Wellspring Capital Partners, Chrysalis Capital Partners, The Blackstone Group and Highland Capital Partners.