Minnesota State Board Approves New Target Range of 20% and 32% for Private Markets, Selects Two Real Estate Funds

The Minnesota State Board of Investment (SBI), which manages $124 billion in retirement and other state funds, approved a new target range for private markets between 20% and 32% of overall assets.

In real estate, SBI greenlighted $100 million to Angelo, Gordon & Co’s. AG Asia Realty Fund V and $200 million to TA Realty’s Realty Associates XIII.

Fund XIII is the latest in TA Realty’s series of value-add funds focused on acquiring industrial, office and multifamily assets, as well as grocery-anchored shopping centers in major US markets.

AG Asia Realty Fund V is a value-add, opportunistic fund that seeks to invest in various property types in Asia. Launched in April 2022, the vehicle has secured about $2.3 billion of equity commitments against an unknown fundraising target.

In the private equity space, the Board selected Goldner Hawn’s Goldner Hawn VIII with a $100 million commitment; a $200 million pledge to Hellman & Friedman’s HFCP XI; a $150 commitment to Paine Schwartz Food Chain VI; and Windjammer Capital VI with $200 million.

In private credit, Marathon’s MDCF III received a commitment of up to $250 million and in real assets, the ECP V fund was approved for a $200 million commitment.

The system currently has 25.7% allocated to private market strategies, including private equity, private credit, real assets and real estate. Officials wrote in its latest commitments update that while the portfolio has been consistently underweight for much of the last decade, in 2022 due to market fluctuations the size of the portfolio relative to the rest of the investment portfolio increased substantially.