WHO MANAGES THE FUND?
The Michigan Small Emerging Manager Program is co-managed by Barings Funds & Co-Investments (Barings “FCI”) team and GCM Grosvenor.
The Barings FCI team serves as a professional limited partner investing across all major investment strategies and geographies within private markets—including buyouts, growth, venture capital, private credit, infrastructure, natural resources and real estate across the globe. Over its 30-year track record, the Barings FCI team has established custom, outcome-oriented solutions through differentiated portfolio construction, access to constrained markets, and adaptability to changing markets and client priorities.
GCM Grosvenor is a global alternative asset manager that invests on behalf of clients who seek allocations to alternative investments such as private equity, infrastructure, real estate, credit, and absolute return strategies. With approximately $59 billion in assets under management, it is one of the world’s largest and most diversified independent alternative asset management firms.
WHAT TYPE OF COMPANIES ARE ELIGIBLE FOR INVESTMENT?
The program is seeking fund, co-investment and secondary opportunities in small, emerging funds and companies across North America.
WHAT AREAS OF FOCUS IS THE FUND INTERESTED IN?
The fund has a variety of areas of focus. Asset classes may include, but are not limited to, buyout, growth equity, venture capital, special situations, real estate, infrastructure, credit, and real return opportunities.
IF I HAVE A BUSINESS PLAN THAT I WOULD LIKE CONSIDERED FOR THE PROGRAM, SHOULD I CONTACT BARINGS, GCM GROSVENOR OR STATE OF MICHIGAN?
Please click the links to be directed to Barings or GCM.
WHAT CONSTITUTES A SMALL AND EMERGING MANAGER?
SMRS typically defines small/emerging managers as those firms with the following parameters:
- Assets Under Management: Firms that manage less than $3 billion
- Target Fund Size: Preference for Funds less than $1 billion
- Generation: Fourth generation or earlier institutional funds
WHAT IS A PRIVATE MARKET SPONSOR?
A private market sponsor either contributes capital, capital market expertise, contacts, or experience to an investment. As a business owner or advisor, a private market sponsor typically handles the company’s capital structure and balance sheet, as well as strategic initiatives—including mergers and acquisitions, joint ventures, and management restructurings. The company’s CEO and other senior management typically maintain responsibility for day-to-day operations.
WHAT IS A CO-INVESTMENT?
A co-investment is an equity or debt investment in a private company, generally made alongside a private market sponsor. Typically, the co-investor maintains minority ownership, while the private market sponsor maintains controlling ownership.
WHAT IS A PRIVATE MARKETS SECONDARY TRANSACTION?
A private markets secondary transaction comprises the buying and selling of pre-existing investor commitments to private market funds. The typical seller of a private market fund position includes limited partner investors seeking to access liquidity to satisfy varied portfolio needs. Secondary private market fund transactions are attractive to investors for a number of reasons, including: portfolio “j-curve” mitigation, blind pool risk mitigation and market and vintage diversification.
IS THE FUND ONLY INTERESTED IN MAKING INVESTMENTS?
The State of Michigan Retirement System has designed the mandate to expand access to capital for emerging/small private market investment managers with a focus on generating returns and increasing the diversity of investments and the inclusion of a broader range of managers
WILL THE PROGRAM PROVIDE CAPITAL DIRECTLY TO COMPANIES?
The program will not provide capital directly into companies or businesses but rather through investment managers. Pursuant to state statutes, SMRS cannot issue grants or forgivable loans, or other types of economic development that earn less than market rates of return.