According to sources, Sacramento County's public pension has partnered with fund-of-funds Pantheon to buy infrastructure assets from the secondary market.
The $7.5 billion public pension fund plans to invest $100 million through the partnership over the next three years as a "base case." However, the pension fund has plan to strengthen this partnership if it works well.
Pantheon will operate a separate account for the assets.
In an interview with an online magazine, Sacramento County Employees' Retirement System CIO Scott Chan said they see the potential for a decent amount of supply of infrastructure and energy assets on the secondary market because of how much money has been raised, regulatory changes, and a mismatch between fund structures and institutional goals.
Real assets accounted for 10% of the fund's overall portfolio as of the close of 2013, 90 % of which was real estate. The pension fund plans to increase its infrastructure allocation and reduce its investment portfolio in real estate.
Chan also said that they needed to partner with an asset manager because they didn't have the specific knowledge required to successfully manage infrastructure investments.
Pantheon won the mandate from Sacramento County beating other fund managers.
Pantheon has a global infrastructure investment team of eight professionals based in the U.S, Europe and Asia, combining over 115 years of investment experience. The team includes dedicated infrastructure experts who combine considerable experience in infrastructure both at a fund and direct level.