The Kern County Employees’ Retirement Association (KCERA) added to its private equity portfolio in the past month, following a $47 million rebalancing pullback in hedge funds and commodities.
Staff also cut emerging markets equity exposure after strong regional returns tied to the AI infrastructure buildout, officials at the $7.5 billion pension fund said. KCERA sold $20 million of its holdings in Carrhae Long Only Emerging Markets. Meanwhile, it committed $10 million to ABS Emerging Markets Direct.
In commodities, officials said that, given current geopolitical uncertainty, the portfolio continues to provide diversification. KCERA trimmed exposure after strong performance, redeeming $32 million from Wellington Commodities, but kept a modest overweight relative to its 5% policy target.
On the hedge fund side, KCERA shifted toward discretionary global macro strategies and sold $15 million of its holdings in the Brevan Howard Fund. The hedge fund portfolio accounts for 12% of assets and sits at its long-term policy target.
Rubicon co-investment
KCERA Chief Investment Officer Daryn Miller approved a $10 million commitment to a co-investment vehicle tied to Rubicon Technology Partners IV, a software-focused private equity fund. Rubicon is using the capital for add-on acquisitions by a portfolio company that provides case management software to nonprofits and state and local government agencies.
KCERA’s first co-investment with Rubicon sits within its current 6% private equity allocation.
Rubicon Technology Partners IV closed at about $1.7 billion in 2023, 34% larger than its predecessor, Rubicon Technology Partners III, which closed in 2020. Rubicon invests in software companies and works with them on acquisitions and operating changes aimed at gaining market share.