Maryland State Retirement and Pension System (SRPS) has formed a $250m (€219.7m) infrastructure investment partnership with Barings.
The $68bn pension fund said the partnership will mainly focus on lower middle-market direct deals and emerging managers. The collaboration includes a $50m allocation specifically for in-state investments and Maryland-based emerging managers.
The majority of the capital for the relationship will be used to create the Terrapin Middle Market Infrastructure Fund, which is structured as a fund-of-one vehicle between the pension fund and Barings.
The fund will target opportunities primarily in North American lower middle-market and middle-market sectors of energy transition, digital infrastructure, transportation and the circular economy, with some allocation for European infrastructure transactions.
Andrew Palmer, chief investment officer for Maryland State Retirement and Pension System, said, “What makes this arrangement especially meaningful is that it’s a fund-of-one.
“We’re not in a pooled investment with multiple stakeholders who may have differing objectives. This is a focused, collaborative effort between SRPS and Barings, aligned on a common goal.”
Mina Pacheco Nazemi, head of Barings’ diversified alternative equity team, said, “SRPS is leading the way in infrastructure and real assets by building a strategy with intentionality focused on generating strong returns while addressing key gaps in the market.
“Traditionally, most capital has flowed to the largest asset managers, but SPRS recognises the growing opportunity and value in the small and middle market space. They should be commended for their forward-thinking and innovative approach to investment strategy.”
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