Private equity attractive: Mass pension fund

NEW YORK (Reuters) - Private equity is still an attractive enough investment to put money into despite the drying up of leveraged buyouts, Michael Travaglini, executive director of the $52 billion Massachusetts state pension fund, said on Monday.

Travaglini said the Massachusetts fund aims to allocate ten percent to private equity investments, and is currently three percentage points short of that target.

"Even if returns aren't what they were historically... and we expect that, we still think they're attractive enough for us as a plan," said Travaglini at the Reuters Hedge Fund and Private Equity summit in New York.

"Private equity, frankly is the only place where we can get a pop. People say 'they're not going to get to mid-20s (percent returns) anymore'. Well, even if they can get us mid-to-high teens, that's still incredibly attractive versus the 8.25 percent (actuarial rate) which is where we're trying to get the total mix."

Travaglini said in 2007 the Massachusetts state pension fund invested $1.5 billion into private equity, of which $1.3 billion was to buyouts, and $209 million was venture capital.

While he's aiming to invest 75 percent in buyouts and 25 percent in venture capital, he said that is not a hard and fast rule and he'll look to be opportunistic if one area is doing better than another.

(For summit blog: summitnotebook.reuters.com/)

(Reporting by Megan Davies; Editing by Tim Dobbyn)