Maine pension seeks flexibility to roll into continuation funds

Many public pensions face governance issues when considering continuation fund opportunities.

Maine Public Employees’ Retirement System is joining a list of US public pensions that may invest in continuation funds as the strategy continues to proliferate.

Public pensions and other institutional investors often face pressure when considering continuation vehicles, which often require allocators to make decisions in an abbreviated timeframe.

Maine, along with its consultant Cliffwater, held an educational presentation on continuation funds at its meeting on 11 January. Affiliate title Buyouts viewed a broadcast of the meeting.

Maine, like many other LPs, requires board approval for certain private equity commitments. This limits its ability to participate in continuation funds. Generally the other option for existing LPs is to simply cash out of their positions in the assets subject to the continuation fund.

“They typically move fairly quickly. The timeline doesn’t fit with our process of due diligence and moving along with the board,” chief investment officer James Bennett said.

In November, Massachusetts Pension Reserves Investment Management changed its governance policies to allow it to invest in continuation vehicles.

Bennett said the $19.1 billion system has not participated in a continuation fund opportunity stemming from its portfolio and has instead chosen to take liquidity.

“I do think it will make sense to participate in some of these going forward,” Bennett said.