CalSTRS commits $1.4 bln to PE in H2 2014

  • Most commitments go to buyout funds
  • Pension commits $205 mln to co-investments in 2014
  • $21.2 bln portfolio generates 13.7 pct IRR

CalSTRS allocated a majority of its second half commitments to large and middle-market buyout funds. The largest commitment during the period went to Centerbridge Capital Partners III, to which it allocated $250 million. Centerbridge Partners closed its third flagship fund on $6 billion in late October.

The $190.7 billion retirement system also committed $200 million each to Hellman & Friedman Capital Partners VIII and First Reserve XIII, which were among the largest funds to close last year.

CalSTRS found its way into middle-market funds as well, allocating $305 million across commitments to Littlejohn Fund V, JMI Equity Fund VIII and Francisco Partners IV.

The retirement system’s second-half activity brought its annual total to $2.8 billion across 33 commitments, according to April 3 meeting materials.

The bulk of CalSTRS’ 2014 commitments went to buyout funds, which account for roughly 70 percent of its portfolio’s $21.2 billion market value. The remainder of CalSTRS’ commitments went to expansion capital, distressed debt and venture capital funds.

Another $205 million went to co-investments. CalSTRS made six co-investments last year, including deals with Blackstone Group and HgCapital, according to meeting materials. Approximately 7 percent of the retirement system’s private equity portfolio is in co-investments, according to its meeting materials.

CalSTRS’ private equity portfolio netted a 13.7 percent internal rate of return through Sept. 30, according to the meeting materials.