Mississippi Allows Pension Fund to Allocate 10% to Private Equity

March 30, 2005 (PLANSPONSOR.com) - Mississippi Governor Haley Barbour has signed a law that will allow the state's pension system to invest in private equity.

The Public Employees’ Retirement System of Mississippi (PERSM) will not be able to expand upon its current investment portfolio of stocks, bonds, cash and real estate and include up to 10% of its assets in limited partnerships such as private equity firms, according to a report from LBO Wire. The new law takes effect July 1 and will likely spark an asset allocation study at the public pension fund.

Currently, the system has 53.8% of its assets in US stocks, 25.5% in US bonds, 18.4% in international stocks, 2.1% in real estate, and 0.7% in cash.

The signing of the bill coincides with similar moves by multiple states, municipalities and cities. On Tuesday, New York City decided to double its investment in such vehicles (See New York City to Double Private Equity Investment ). In November, New Jersey decided to make a similar move and the Governor of New Mexico is also expected to sign a similar law that would allow that state’s pensions to invest in private equity.

PERSM has around $1.7 billion in assets for the pensions of public state employees.