Newly Merged Carlyle/AlpInvest Signs MERS in $750M Deal

In an effort to build a bigger private equity portfolio, the $6.5 billion Municipal Employees Retirement System of Michigan has engaged a newly merged Carlyle and AlpInvest to manage as much as $750 million of the pension’s money.

The pension currently has a 9.6 percent allocation to private equity, or slightly more than $630 million in invested capital.

The new MERS initiative calls for $500 million to be invested by AlpInvest, the Netherlands-based fund-of-funds unit of Carlyle, plus $250 million to be invested by Carlyle’s managed funds group. The investment contract is for five years.

The Washington D.C.-based Carlyle Group, which now manages about $150 billion in assets, agreed in January to merge with AlpInvest. That merger, which was originally slated to close in March, had been delayed until July 1. The MERS deal is the first asset management deal to be announced by the newly merged private equity firm.

“We are very happy to be AlpInvest’s first client in the U.S. market,” said MERS’s chief executive Anne Wagner in a statement. “We anticipate building this new relationship to leverage their teams’ depth and breadth of expertise and experience as MERS explores the global private equity markets.”

MERS manages pension benefits for 86,000 employees that work for 750 of Michigan’s municipal agencies.