Treasurer Wooden Announces $200M In Commitments

Press release from the Office of the Treasurer:

April 19, 2021

At last week's Investment Advisory Council (IAC) meeting, Connecticut State Treasurer Shawn T. Wooden announced his decision to commit $100 million to the BlackRock Global Renewable Power Fund III, a renewable power generation infrastructure asset and $50 million to Rubicon First Ascent, L.P., a value add real estate asset. Treasurer Wooden also announced his decision to commit $38 million to Icon Partners II, L.P., and $11.5 million to Icon Partners III, L.P., both of which are fund extension opportunities within the CRPTF’s private equity allocation.

“Connecticut’s first credit rating upgrade in over 20 years, historic high Budget Reserve Fund, and strong cash position continues to put the State on a stronger financial footing,” said State Treasurer Shawn Wooden. “Due to our continued focus on fiscal sustainability and prudent decision making, the CRPTF has been able to focus on committing capital to those managers that help strengthen and improve upon the progress the CRPTF has made in its diversification of investments and strong results.”

Treasurer Wooden also announced his decision to award the hedge fund Risk Mitigating Strategy Investment Advisor mandate to Stamford, CT-based K2 Advisors.

“While this decision wasn’t an easy one due to highly competitive proposals, we believe K2 Advisors’ strength in the hedge fund investment space and ability to provide Connecticut with a customized solution for protection against adverse market events will serve Connecticut well,” said State Treasurer Shawn Wooden. “Their focus on continuing to incorporate Environmental, Social & Governance components into their manager selection and investment processes are consistent with our long-term investment strategy.”

Interim Chief Investment Officer Steve Meier provided a market update for the first quarter of the calendar year and highlighted the CRPTF’s performance through February of 2021.

Principal Investment Officer Danita Johnson introduced two real estate fund opportunities to the IAC: Mesirow Financial Real Estate Value Fund IV and Penzance DC Real Estate Fund II, opportunities in which Treasurer Wooden is considering an investment of up to $100 million and $50 million, respectively. Mesirow Financial Real Estate Value Fund IV targets multifamily investment opportunities in the U.S. apartment sector with a primary emphasis on providing market competitive product for middle and upper-middle income renters, and Penzance DC Real Estate Fund II is focused on assets located in the Washington, DC Metro area that provide opportunities for capital appreciation by performing value add, operationally intensive business plans.

“A commitment to Mesirow Financial Real Estate Value Fund IV would present an opportunity for the CRPTF to expand and diversify its multifamily exposure, a defensive sector, with the potential to create a blended portfolio with a value-added risk-return profile,” said State Treasurer Shawn Wooden. “A commitment to Penzance DC Real Estate Fund II would present an opportunity for the CRPTF to invest with an experienced local operator in a region that has been stable and continues to show strong growth.”

Investment Officer Olivia Wall presented an innovative US REIT strategy to the IAC. This investment strategy, implemented with BlackRock, focuses on a passive REIT strategy with no security selection but with an active sector allocation to specific real estate segments.

“The targeted REIT strategy is cost-efficient, innovative and in-line with the CRPTF’s niche strategy focus within its real estate portfolio,” said State Treasurer Shawn Wooden. “It also represents an attractive opportunity for the CRPTF to reach our long‐term strategic real estate allocation target.”

Lastly, Fixed Income Principal Investment Officer Lyndsey Farris and Public Equity Principal Investment Officer Paul Osinloye reviewed their respective asset classes and provided updates and insights into performance, portfolio positioning, and current strategic initiatives.

“Given the size of the assets in the CRPTF, we must continue to be innovative and consider investment opportunities that enhance the attributes and risk profile of the funds,” said State Treasurer Shawn Wooden. “The ability to deploy capital through different mechanisms affords us the opportunity to be flexible and buildout a portfolio that is consistent with the objectives of this Office and the funds we manage.”

This press release was produced by the Office of the Treasurer. The views expressed here are the author's own.