Mass Water Selects RRA, BGO in RE Debt Manager Search, Mulls Asset Mix Changes

The Massachusetts Water Resources Authority Retirement System has hired two new managers for its real estate debt portfolio and is considering changes to its asset allocation structure. 

Agenda materials related to its board meeting on January 30 disclosed its selection of RRA Capital and BGO in its real estate debt manager search, approving a $7M allocation to RRA for 2024 and $10M to BGO for 2025. ACORE Capital, Bridge Investment Group, and PCCP were also considered during the final phase of the search, which closed at the December, 19, 2024, board meeting. 

The pension is also considering adjustments to its asset mix where it will see increased target weights in large-cap equity to 24% from 22%; non-US equity to 9% from 8%; private equity/debt to 16% from 15%; and hedge funds to 6% from 5%. Meanwhile, it may potentially shave off allocations to small-cap equity from 7% to 5%, emerging equity from 5% to 4%, and real estate from 10% to 8%. Other asset classes will maintain their original benchmarks, namely global equity and core bonds with 8% each, multi-sector credit with 10%, and cash with 2%. 

General consultant NEPC assisted Massachusetts Water in the manager search and the strategic asset allocation review.

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Written By: Dakota

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