MassPRIM eyes widening CIO authority to seize VC opportunities

Staff says added flexibility will help fund find more opportunities.

Massachusetts Pension Reserves Investment Management Board may allow its chief investment officer to make decisions on certain venture capital commitments without first requiring investment committee and full board approval.

LPs have endured a frantic pace of fundraising, leading many to consider ways to maintain flexibility when presented with investment opportunities. The proposal from MassPRIM’s investment team reflects this through its proposed policy that would speed up the process in making commitments to venture capital funds.

The proposed policy limits commitments without board approval to $75 million to any single fund. New venture capital commitments also may not exceed 20 percent of the annual commitment made to private equity, according to the presentation.

The proposed policy does not extend to venture capital co-investments.

According to a presentation made before the MassPRIM Investment Committee on Tuesday, LPs have had difficulty accessing desirable venture capital fund managers due to their smaller fund sizes.

A quicker timeline for venture capital fundraising also requires LPs to act quickly when presented with possible commitments, according to the presentation.

“Venture capital is a very attractive asset class and it’s difficult for small teams like ours to manage,” said MassPRIM senior investment officer Helen Huang.

MassPRIM’s full board will vote on the proposed changes at a board meeting scheduled for next week.