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Commitments To Private Equity Funds

Seventeen public pension plans reported commitments to Private Equity funds in July 2019, accounting for $822 million of investments.

Q2 hedge fund letters, conference, scoops etc

Average commitment size by public plans was $29 million per commitment, with a total of 28 commitments reported.

As of July 31, 2019, 100 public plans were under allocated against their Private Equity target allocations, representing more than $40 billion of potential commitments available for fund managers.

Top Funds & Activity

Out of the 28 commitments reported to Private Equity funds in July, Los Angeles Fire and Police (LAFP) reported the most of any public plan, with $90 million across three funds: New Enterprise Associates 17 ($20 million), Platinum Equity Capital Partners V ($50 million), and Polaris Partners IX ($20 million).

Tying with LAFP for the title of top investor by total reported commitment amount in July was San Francisco Employees’ Retirement System. The $24 billion public plan reported commitments to e.ventures US VI ($30 million) and the Vista Equity Endeavour Fund II ($60 million).

Three other notable commitments reported by public plans in July included $75 million each by Pennsylvania SERS to Wind Point Partners IX, Connecticut Retirement Plans and Trust Funds to Vistria Fund III, and New York State Teachers’ Retirement System to CapStreet V.

Highlighted News

Private Equity news and activity of most interest to users of our Market Intelligence platform during July 2019 included documents from Los Angeles City Employees’ Retirement System (LACERS), San Francisco Employees’ Retirement System (SFERS), and Connecticut Retirement Plans and Trust Funds (CRPTF).

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Topping the list of most viewed documents in the period was a “Private Equity Education” piece presented by TorreyCove Capital Partners to LACERS, providing an overview of the Secondary Market, Co-Investments and Benchmarking. Education and research presentations by Consultants or Gatekeepers are usually an indicator of changes in allocations or strategy by an investor. This presentation by TorreyCove specifically outlined potential next steps, including a portfolio review to establish “core” relationships and “non-core” relationships to inform a hypothetical portfolio sale in the Secondary market, an evaluation of how to increase LACERS’ exposure to Co-investments, and finally, action to formalize and adopt the use of a new, complimentary private equity specific benchmark for the LACERS private equity portfolio.

On July 10, 2019 SFERS private markets consultants’, TorreyCove Capital Partners and Cambridge Associates, presented an update of the pension plan’s $4.9 billion Private Equity portfolio.

During 2018, SFERS reported $1.37 billion of commitments to 26 managers, nine of which were new manager relationships. Going forward, SFERS plans to continue to consolidate its large/mega-cap manager line up, selectively re-upping with high-conviction core managers. Commitment pacing is estimated to scale from $900 million in 2019 to $1.2 billion in 2025.

CRPTF consultant StepStone held a review of the plan’s Private Equity portfolio, with data as of 12/31/18, which piqued users’ interest in July. The market value of the CRPTF Private Equity program was reported at $2.57 billion, with current exposure at 7.9% of total plan assets against a range of 8.0% – 14.0%.
CRPTF continues to work towards meeting its target: commitments made by CRPTF to 2018 vintage year funds totalled $894 million, the highest amount committed to a single vintage year by the plan since 2002 ($900m), and up from the $498 million committed to 2017 vintage year funds.

As of December 31, 2018, CRPTF’s portfolio is primarily concentrated in Buyout funds, which represent 47.4% of total exposure as of quarter-end. Funds targeting investments in North America accounted for 89.0% of CRPTF’s total Private Equity exposure as of quarter-end. Detailed breakdowns of recent commitments, its manager roster, and portfolio exposure and performance were also reported by StepStone in this review.

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Article by eVestment


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