Arkansas Teacher builds out exposure to diverse managers

Arkansas Teacher Retirement System placed five commitments to minority-led managers since July 2021, according to a presentation made at its September board meeting.

Many LPs have emphasized investing in diverse managers. Diverse firms tend to be newer, and emerging managers are facing headwinds in raising funds as LPs have been sticking more to their established relationships in the uncertain economy.

Arkansas Teacher committed $30 million to Clearlake Capital Partners VII and $30 million to BV Investment Partners XI since July 2021. The $19.7 billion system also made three commitments indirectly through its stake in Franklin Park Corporate Finance Access Funds I and II, which placed money with Ascend Partners I, Banneker II and Sunstone Partners III.

Details of these commitments were included in a presentation from private equity consultant Franklin Park at the system’s board meeting held September 26.

Franklin Park performed detailed analysis on 12 of 65 minority managers it reviewed for the system.

Managers included ABX I, Innovate Capital Growth I, Invision Capital III, Lincoln Road I, Long Arc I, Material Impact III, Motive Partners II, Siris V and Vista Equity VIII, according to the presentation.

Since 2013, Arkansas Teacher committed a total of $330 million to 12 funds classified as diverse owned, the presentation said.

These funds include Lime Rock Resources III, One Rock Capital Partners II, Sycamore Partners III, Vista Foundation II and Vista Foundation III, according to the presentation.

Arkansas Teacher currently allocates 15.5 percent of its total portfolio to private equity, above its 12 percent target, according to consultant Aon, which also participated in the recent board meeting.