The Massachusetts Pension Reserves Investment Management Board (MassPRIM) plans to continue increasing its exposure to lower- and mid-market buyouts as larger managers weigh on its private equity performance. The pension fund has lagged its benchmark over the one-, three- and five-year periods, with private equity driving "nearly all the relative underperformance," chief investment officer Michael Trotsky said at its 18 August board meeting.

The system's limited exposure to AI-related sectors has weighed on its PE returns, according to PE director Michael Mc Girr. This strategic pivot toward smaller buyouts reflects MassPRIM's effort to address persistent underperformance in its private equity portfolio.

By targeting the lower and middle market, MassPRIM aims to capture opportunities that larger managers may overlook, potentially improving risk-adjusted returns across its private equity allocation.