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CalPERS bets big on Carlyle with year-end commitments

  • CalPER commits more than $275 mln to Carlyle
  • Includes $76 mln stake in Veritas deal
  • Pension also backs TowerBrook for $250 mln

The California Public Employees’ Retirement System furthered its relationship with The Carlyle Group at year end, allocating more than $275 million to the firm in November and December, according to pension documents.

In December, CalPERS allocated $76 million to a co-investment vehicle called Carlyle Havasu Coinvestment LP, which Carlyle used toward its $7.4 billion acquisition of data storage unit Veritas from Symantec Corp in early 2015.

A month earlier, the retirement system allocated $200 million to Carlyle’s second middle-market buyout fund, Carlyle U.S. Equity Opportunity Fund II, which recently held a final close on $2.4 billion.

Carlyle’s first middle-market buyout fund raised $1.1 billion in 2011. Fund I netted a 25.7 percent IRR and 1.32x multiple on invested capital through September 30, 2014, according to the Los Angeles County Employees Retirement Association, which invested in both Fund I and II.

CalPERS is a longtime limited partner in Carlyle Group funds and has committed roughly $4.8 billion to the firm since 2001, according to the $274.9 billion pension system’s website. The pension also co-invested alongside Carlyle in an earlier deal, picking up a $104 million stake in Acosta Inc in 2014.

In addition to its commitments to Carlyle, CalPERS committed $250 million to TowerBrook Structured Opportunities Fund in November. TowerBrook Capital Partners had circled more than $800 million as of November, well north of its $600 million target, Dow Jones reported.

CalPERS had a 9.4 percent allocation to private equity as of December 31, slightly off its 10 percent target, according to pension documents. The private equity portfolio is valued at $27.4 billion.

Action Item: For more information about CalPERS’ PE portfolio, visit http://bit.ly/1QToQLK