Arkansas teachers’ pension eyes new managers for 2024

Arkansas Teacher Retirement System plans to add new managers to its private equity portfolio this year.

Many LPs have indicated their preference for existing relationships as overallocations and liquidity concerns limit how much investors can commit to private equity. This makes open slots with LPs highly coveted in the constrained fundraising environment.

Consultant Franklin Park discussed Arkansas Teacher’s annual private equity pacing plan at the system’s February 5 investment committee meeting. Buyouts watched a broadcast of this meeting.

The system plans to commit $385 million to 10 private equity funds in 2024, spread across seven direct commitments and three Franklin Park vehicles, according to Franklin Park’s presentation.

Many of the $21.3 billion system’s existing managers are not fundraising, allowing for new relationships, according to Franklin Park managing director Michael Bacine.

“The pacing plan is weighted to include newer managers not currently in your portfolio. Most of your existing managers have come up in recent years, so you will probably see new managers added this year,” Bacine told the investment committee.

The system recently added mid-market buyouts shop Beekman Investment Partners to its roster by committing $35 million to its new flagship Fund V.

According to the presentation, 55.5 percent of Arkansas Teacher’s private equity portfolio is made up of direct commitments to buyouts funds, with 16.6 percent exposed to Franklin Park co-investment vehicles and 14.4 percent dedicated to Franklin Park venture capital funds.

The system allocates 13.7 percent of its total fund to private equity, above its 12 percent target, board documents said.