CalPERS pledges $500 mln to Silver Lake, to co-invest alongside Fund V

  • CalPERS can invest alongside Silver Lake V, per Form ADV
  • New fund closed on $15 bln in April
  • $500 mln commitment was CalPERS’s first of 2017

California Public Employees’ Retirement System inked a $500 million commitment to Silver Lake in April, marking its first private equity commitment of 2017, according to materials released in advance of its June 19 meeting.

CalPERS also secured the ability to co-invest “previously elected” amounts alongside Silver Lake Partners IV and Silver Lake Partners V, according to Silver Lake’s Form ADV filed earlier this year. In April, Fund V held a final close on $15 billion for investments in large technology companies.

CalPERS has been an active limited partner for Silver Lake for some time, having committed roughly $925 million across Silver Lake Partners II, III and IV.

As of Sept. 30, 2016, the system’s commitment to Fund IV was netting a 31.9 percent internal rate of return and 1.4x multiple, its website shows. The commitments to Funds II and III were netting IRRs of 11.4 percent and 18.2 percent, respectively, as of that date.

CalPERS previously held a 9.9 percent stake in Silver Lake’s management company, but slowly wound down its position over several years in the first half of the decade.

The $323.9 billion retirement system did not commit to a single fund in the first quarter of the new year, according to its monthly investment disclosures. CalPERS has been winnowing the number of PE managers in its portfolio by unloading older fund stakes on the secondary market and by being more selective in its recent commitments.

CalPERS valued its PE portfolio at $25.9 billion as of April 30. The retirement system held roughly 8.1 percent of its assets in private equity as of that date.

CalPERS and Silver Lake declined comment.

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