CalPERS re-ups $500 mln to Cerberus separate account

  • Previous Cerberus account netting 41.8 pct
  • CalPERS re-ups to Permira
  • $303.5 bln pension has 8.9 pct allocation to PE

California Public Employees’ Retirement System committed almost $1 billion to private equity in July, including a re-up to a separate account with Cerberus Capital Management.

CalPERS committed $500 million to Cerberus CP Partners II, an investment disclosure included in September meeting materials shows. The account will invest in distressed-for-control deals, spokeswomanRosanna Westmoreland wrote in an email.

Cerberus could not be reached for comment.

The Stephen Feinberg-led firm has emerged as one of CalPERS’s top managers since the system moved in 2014 to trim its roster of PE relationships to around 30 general partners.

CalPERS committed $50 million to a co-investment with the firm earlier this year. It’s committed $1.5 billion to the firm’s funds and separate accounts since 2012.

The $303.5 billion retirement system committed $600 million to Cerberus CP Partners in 2013, which netted a 41.8 percent internal and a 1.5x multiple through Dec. 31, 2015. Cerberus used the fund to acquire a 5.7 percent stake in crude-oil-tanker company DHT Holdings Inc in 2014, according to an SEC filing.

In addition to its commitment to Cerberus, CalPERS committed 440 million euros ($493.3 million) to Permira’s sixth flagship fund, which is targeting 6.5 billion euros with a hard cap of 7.25 billion euros. CalPERS is a limited partner in four of the European buyout specialist’s previous funds.

Permira V closed on 5.3 billion euros in 2014 and has yet to generate meaningful returns. Fund IV, a 11.1 billion euro 2006 vintage fund, was netting a 7 percent internal rate of return and 1.4x multiple as of Dec. 31, according to CalPERS’s website.

CalPERS held 8.9 percent of its assets in PE as of June 30, a little more than a percentage point short of its 10 percent allocation target. The portfolio was valued at $26.4 billion.

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