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Investors - OCTOBER 1, 2014

Merced County begins investing in infrastructure

by Reg Clodfelter

The Merced County (Calif.) Employees’ Retirement Association has made its first foray into the infrastructure sector, committing $20 million, or 3.2 percent of the fund’s total assets, divided evenly between two different infrastructure funds. Steven Bland, plan administrator with MCERA, confirmed the commitments and noted that the fund has a 3 percent target allocation to infrastructure.

KKR Global Infrastructure Partners II received $10 million from the retirement association. KKR’s GIP II launched earlier this year with a $2 billion fundraising goal. Its predecessor closed in 2012 after raising more than $1 billion to invest in a wide range of global infrastructure including midstream energy, renewable energy, utilities (water, power and gas), social infrastructure and select transportation-related infrastructure.

The other $10 million went to Morgan Stanley Infrastructure Partners II, which launched in 2012 and is reportedly looking to raise as much as $4 billion. The fund received a number of large commitments form institutional investors over summer, including $300 million from the California Public Employees’ Retirement System in August, as well as $250 million from the Alaska Permanent Fund Corp. and $350 million from the Teacher Retirement System of Texas in June. Morgan Stanley’s predecessor fund closed in 2008 after raising $4 billion to invest globally in infrastructure sectors including transportation, energy and utilities, social infrastructure and communications.

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