The Municipal Employees’ Retirement System of Michigan (MERS) provides retirement, disability, and death benefits to employees of local governments across Michigan. With over 800 participating municipalities and approximately $14 billion in assets, MERS is one of the largest municipal retirement systems in the Midwest.
Investment Strategy
MERS maintains a diversified investment portfolio including public equities, fixed income, private equity, real estate, and infrastructure. The Board of Trustees sets the fund’s strategic allocation targets based on actuarial studies and long-term capital market assumptions. The investment program is designed to deliver stable, risk-adjusted returns that support the system’s benefit obligations.
Private equity is the largest alternatives allocation, with commitments spanning buyout, growth equity, and secondaries strategies. Real estate investments include core and value-add funds across commercial property sectors. Infrastructure investments provide inflation protection and stable cash yields from essential-service assets.
MERS pools assets from its participating employers into a single investment trust, which provides scale advantages in accessing institutional-quality managers and negotiating competitive terms.
How to Approach
Fund managers should contact the MERS investment department in Lansing, Michigan. The team evaluates managers based on quantitative and qualitative factors, including performance attribution, team depth, operational infrastructure, and alignment of interests. MERS values straightforward communication and transparent reporting. Introductions through industry conferences or the fund’s consultant relationships are effective entry points.
Frequently Asked Questions
What is MERS of Michigan's alternatives allocation?
MERS allocates approximately 18% of its $14 billion portfolio to alternatives, including private equity, real estate, and infrastructure. The fund has built a diversified alternatives program over the past two decades to complement its public market investments.
How does MERS select private equity managers?
MERS employs an internal investment team that works alongside external consultants to evaluate private equity managers. Selection criteria include track record consistency, team stability, investment process discipline, and competitive fee structures. Typical commitments range from $25 million to $100 million per fund.
How should GPs approach MERS?
GPs should contact the MERS investment team in Lansing or engage through the fund's consultant network. MERS is receptive to meetings at industry conferences and values managers who can clearly articulate their strategy and differentiation. Initial outreach should include a fund overview and audited track record.
