Mass PRIM and CalPERS mandate for natural resources and timber

Massachusetts fund brief could include renewable energy, farmland and mineral investments.

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The $52.7bn (€34.3bn) Massachusetts Pension Reserves Investment Management Board (PRIM) is in the market for one or more asset managers to run $900m in natural resources assets, which it has said could include renewable energy, farmland, and mineral investments.
The fund has also issued a request for proposal to hire investment managers for the Board’s Commonwealth of Massachusetts Based Economically Targeted Investments (ETI) programme. The ETI programme already has committed capital of $230m in a diversified portfolio of fixed income, real estate, and alternative investments, including the participation in the issuance of over 1,400 mortgages to low-income home buyers.
PRIM said the natural resources equities mandates would be long only, active approaches benchmarked to CPI + 5% or other comparable benchmarks for the product. It said it had no style preference for the mandates. The deadline for submissions for the mandates is March 24 with proposal documents obtained from William Fink, investment analyst at the fund: wfink@mapension.com
Cliffwater, the US alternative investment consultant isassisting with the tender process with a decision on manager hires expected by the start of June.
Further information can be found on the pension fund’s website: www.mapension.com.
At the end of 2007, PRIM sold half of a $2bn forestry portfolio, the assets from which it is using to fund the new natural resources mandate.
Seperately, CalPERS, the giant $247bn (€181bn) US pension fund for Californian public employees, has begun making investments in timber that could top $2.4bn (€1.6bn) in the coming years. The fund said it would invest at least 1% and perhaps more in forestry. CalPERS is looking to invest the capital through a combination of investment structures, including commingled funds and separate account relationships with timber managers.
Charles P. Valdes, chair of CalPERS investment committee, said: “This policy sets a strong foundation for sustainable forest management practices in our investment portfolio and positions us well to profit from the global markets in forest carbon credits.”