CalSTRS Commits $360M to PE and VC

In the latest quarterly investment report, the $153 billion California State Teachers Retirement System disclosed that it had made $300 million in fresh private equity commitments, plus another $60 million in commitments for venture capital. A spokesman for CalSTRS, Ricardo Duran, also said the pension was fielding proposals from various firms seeking to become its private equity consultant.

CalSTRS runs one of the nation’s largest private equity programs, with more than $30 billion in committed capital.

The new commitments include $225 million to Centerbridge Capital’s Centerbridge Capital Partners II LP, a diversified buyout fund that closed earlier this year having raised $4.4 billion. The commitment is CalSTRS’s third to Centerbridge: the pension previously committed $150 million to Centerbridge Capital Partners LP and $250 million to Centerbridge Special Credit Partners LP. According to CalSTRS fund performance data from 2010, Centerbridge Capital Partners LP, vintage 2006, delivered an IRR of 17.3 percent, while Centerbridge Special Credit Partners LP, vintage 2009, had an IRR of 36.8 percent. Overall, Centerbridge manages $10 billion in assets.

CalSTRS also committed $75 million to Energy Spectrum Partners’ Energy Spectrum Partners VI LP, a $1 billion fund that aims to invest in mid-stream energy companies. This is CalSTRS’s second commitment to Energy Spectrum, after having committed $50 million to Fund IV in 2004. That fund, according to the same performance data, has delivered a net IRR of 10.5 percent.

Finally, CalSTRS committed $60 million to GGV Capital‘s GGV Capital IV LP, a $600 million venture fund that aims to make investments in technology and consumer firms in both the United States and China. This is the pension’s first commitment to GGV, which was previously called Granite Global Ventures.

As its private equity consulting contract with Pension Consulting Alliance comes to a close, CalSTRS said it was seeking proposals from other firms seeking the role. PCA has been CalSTRS’s private equity consultant since 2007 and is expected to bid again for the role. The new contract would be for an initial three years, plus two one-year extensions.