CalPERS selects Trident VII for $270 mln re-up

  • Trident VII targets $5.25 bln
  • CalPERS increasingly selective in direct commitments to PE funds
  • Trident investments netting 15.1 pct IRR through June 30, per report

California Public Employees’ Retirement System committed $270 million to Stone Point Capital’s latest Trident fund in October, an investment report released Dec. 12 shows.

Stone Point set a $5.25 billion target for Trident VII, according to a Hamilton Lanereport Buyouts obtained through a records request to Teachers’ Retirement System of Louisiana. Louisiana Teachers’ committed as much as $75 million to Fund VII in November.

California’s $300.1 billion public pension system has grown increasingly selective in its direct allocations to private equity funds in recent years. In early 2015, CalPERS said it would cull its roster of general partners to about 30 from roughly 100. Fewer managers are getting re-ups from CalPERS, which unloaded some of its PE holdings on the secondary market.

“Larger capital commitments [to proven managers] ensures more competition for our capital, better performance — we believe — and more favorable fee structures,” Chief Investment Officer Ted Eliopoulos said during a June 2015 meeting.

CalPERS committed $250 million to Trident VI in 2014. The fund has yet to generate meaningful returns, netting a 5.1 percent internal rate of return and 1x multiple through March 31, CalPERS’s website says.

Stone Point’s aggregate performance is strong historically, the Hamilton Lane report shows. Four of the five Trident funds tracked in that report had notched top-quartile returns for their respective vintage years. The 98 investments made from Trident II through Trident VI netted an aggregate IRR of 15.1 percent through June 30, the report says.

CalPERS held 8.4 percent of its assets in PE as of Oct. 31, just above its 8 percent interim allocation target, according to an investment report. The private equity portfolio is valued at $25.4 billion.

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