The Contra Costa County Employees’ Retirement Association (CCCERA) is investing $100m (€90.9m) in a natural resources separate account.
The pension fund has proposed a change for its investment with Commonfund Capital, awarding the manager a separate account mandate instead of investing in its Natural Resources Fund X, according to a board meeting document.
The CCCERA previously committed $50m to Commonfund’s Natural Resources Fund IX.
The pension fund said it saw better alignment with LP/GP interests with the switch of vehicle, as well as the opportunity to widen its investment opportunity set.
Commonfund is to invest CCCERA’s capital in primary fund investments, secondaries and co-investments in timber, agriculture, renewable energy and infrastructure.
Although the fund will be open to opportunistic investments, 50-60% of the capital will target primary investments.
The separate account has a 7% preferred return for the pension fund.
The amount planned for co-investments and secondaries is much higher than planned for Fund X, which had a 25% allocation to the strategies.
Commonfund, making a $200,000 co-investment, is expected to invest the separate account capital globally over three years.
The separate account will last for 12 years, with an additional one-year extension option.
The CCCERA’s investment consultant, Verus Investments, believes a strategic, long-term allocations to natural resources can provide inflation protection, a differentiated source of returns and portfolio-level diversification.
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