Allstate Has Up To $450M To Pledge

Allstate Investments, the alternative investments unit of insurance company Allstate Corp., intends to commit $400 million to $450 million to private equity this year, Director Ross Posner said at a recent conference in New York.

Pledges will go to 15 general partners, Ross said, some for re-ups with existing managers and some for new relationships. In addition to making fund commitments, Ross also noted the firm does direct co-investing and provides mezzanine debt for buyouts.

He also indicated the firm was interested in exploring opportunities in China and Latin America. In 2007, Allstate Investments opened its first non-U.S. office in London.

Regarding how they choose their general partners, “We look for replicable value creation,” he said. As far as what he wants from his GPs, Ross said he holds transparency “in high regard,” wanting to know what the problems are in portfolio companies and why those problems exist. He also wants to know that GPs have stayed “on strategy over time.” Ross also noted that time diversification is important to him and that his firm pays a lot of attention to “how the key-man provision is worded.”

Incentives to be in a first close of a fund “don’t affect our actions,” he said. When asked which is his preferred close to be in, he said, “I’m a little schizophrenic” about that, adding that he likes to be in a final close, but that he also wants to support existing relationships with re-ups to their first close.

The firm typically cuts checks in the range of $15 million to $20 million per pledge and commits to buyouts, mezzanine, distressed, infrastructure, growth capital and venture capital. Direct investments usually range from $15 million to $30 million per deal.

Allstate Investments manages a $2.5 billion private equity portfolio with more than 75 GPs, including Apollo Management, Cerberus Capital Management, Sweden-based EQT Partners, GTCR Golder Rauner and Sterling Capital Partners, and has exposure to more than 25 countries.