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Arkansas Teacher plans $275 mln for PE in 2016

  • Plan includes allocation for co-investment and next-gen managers
  • $14.6 bln pension to commit to six buyout, growth or turnaround funds
  • ATRS commits more than $200 mln to PE on December 7

Arkansas Teacher Retirement System (ATRS) plans to commit approximately $275 million to private equity in 2016, including capital earmarked for co-investments and commitments to emerging managers, according to an executive summary obtained through a records request.

The $14.6 billion pension already allocated a portion of that total to funds managed by consultant Franklin Park at its December 7 meeting, including $25 million each to Franklin Park Venture Fund Series 2016 and Franklin Park International Fund 2016, according to Executive Director George Hopkins.

ATRS also allocated up to $65 million for its co-investment and emerging manager strategy through the ATRS/FP Private Equity Fund (previously known as the Franklin Park Co-Investment Fund).

A portion of the $65 million commitment will count toward the 2016 pacing plan, Hopkins said. The plan earmarked up to $25 million in co-investments with another $10 million will be committed to “one or more next-generation manager funds,” according to the summary.

In addition to its commitment to Franklin Park funds, the $14.6 billion pension plans to commit between $130 million and $160 million across four to six buyout, growth equity or turnaround funds. Separate of those commitments, ATRS will likely commit up to $60 million to one or more debt-related vehicles.

The pacing plan, which was recommended by Franklin Park and ATRS staff, will maintain the pension’s 10 percent allocation to the asset class.

In addition to reviewing its 2016 pacing plan, Arkansas Teacher Retirement System approved commitments totaling up to $90 million across private equity funds at its December 7 meeting, Hopkins said. It is unclear whether the following commitments count toward its 2016 pace:

  • $30 million to Thoma Bravo Discover, which is targeting $1 billion for middle market investments.
  • $30 million re-up to DW Healthcare Partners IV, which will invest in healthcare sector companies. (The firm’s third fund netted ATRS a 13.4 percent internal rate of return as of December, 2014, according to pension documents.)
  • Up to $30 million to PineBridge Structured Capital Fund III for investments in mezzanine debt and preferred equity securities. (The fund’s target could not be determined.)

Action Item: George Hopkins and ATRS staff can be reached at 501-682-1517