The Michigan state pension fund scheme – which manages four pension plans in Michigan – invested $170 million in infrastructure in the fourth quarter of 2011, a March 1 investment advisory committee report showed.
The so-called Bureau of Investments (Bureau), responsible for overseeing a total of $48 billion in retirement capital, put $100 million with an infrastructure portfolio owned by Credit Suisse Group and $70 million with an India-centric infrastructure fund owned by JP Morgan Asset Management, the report said.
The Credit Suisse fund is called Customised Infrastructure Strategies, while the JP Morgan vehicle is named the JP Morgan AIRRO India SideCar Fund. The Bureau described the Credit Suisse fund as a “multi-sector, geographically diverse portfolio” focused on the secondary infrastructure fund market. The JP Morgan fund has a toll road focus, the Bureau said.
The pension provider went on to characterise its allocation to infrastructure as a method to achieve “predictable and defensible cash flow return and appreciation,” citing the asset class as having a “low correlation” to the broader market.
The potential for direct investment in infrastructure is being reviewed, according to the Bureau, including a stake in a US “communication line” and a UK energy transmission line.
Pension staff has met in-person with unnamed infrastructure investing personnel, but Brian Liikala, administrator for the real estate and infrastructure division of the Bureau, did not return a request for further comment.
The $37 billion Michigan Public School Employees Retirement System is the largest pension plan managed by the Bureau, which is also in charge of investing for the Michigan State Employees Retirement System, the Michigan State Police Retirement System and the Michigan Judges Retirement System.