Maine pension to propose policy changes for continuation fund opportunities

Maine Public Employees Retirement System will consider policy changes that will allow it to invest in continuation funds at its March board meeting.

Many LPs, in particular public pensions, aren’t able to invest in continuation vehicles due to their quick approval timelines. Maine is one of the first public pensions to propose policy changes to allow for flexibility in these opportunities.

The board discussed continuation vehicles and the proposed changes at its 8 February board meeting. Affiliate title Buyouts watched a broadcast of the meeting.

According to chief investment officer James Bennett, the $19.1 billion system has had 20 opportunities to invest in continuation vehicles over the past three years. However, the system’s board governance policies prevent the system from making commitments to CVs.

“Looking forward, there could be attractive opportunities with certain continuation funds,” Bennett said.

The proposed policy changes would allow the system’s investment staff, chief executive and general counsel to sign off on a continuation fund opportunity without board approval, according to board documents.

The maximum commitment level to a continuation fund would be $25 million, board documents said.

Any continuation fund commitments would fall within the system’s targeted allocation to co-investments within its private equity program, which is 7.5 percent, Bennett said.

Massachusetts Pension Reserves Investment Management recently approved policy changes allowing it to commit to continuation funds.

Some institutional investors are adjusting their processes to address the growing continuation fund opportunity. Last month, Massachusetts Pension Reserves Investment Management promoted a member of its private equity team to manage investments in GP-led secondaries.