CalSTRS pledges $950 mln to private equity; Carlyle VI gets $250 mln

  • CalSTRS commits $815 mln to funds
  • Pension system channels $135 mln for co-investments
  • Carlyle Partners VI LP gets largest single commitment

The California State Teachers Retirement System channeled $950 million into private equity investments in the fourth quarter, with a $250 million pledge to Carlyle Group’s flagship Carlyle Partners VI LP marking the largest single commitment, according to a report released this week.

The pension system finished out the last three months of 2013 by sticking with existing GPs in all of its commitments.

CalSTRS took part in a total fundraising tally of $13 billion for Carlyle Partners VI, one of the largest private equity funds since the 2008 financial crisis.

CalSTRS also committed $200 million to Energy Capital Partners III, a $2.1 billion North American energy infrastructure fund, and $200 million to Onex Partners IV LP, a $5 billion fund for upper-market investments in North America.

CVC Capital Partners Asia Pacific IV LP drew a $125 million commitment and OrbiMed Private Investments V LP drew $40 million.

Among the $135 million for co-investments, CalSTRS pledged $55 million to CVC’s Asia Education Holdings Ltd deal, $40 million to BC Partners’ BC Euro Cap — Hercules (Aenova), and $40 million to Kohlberg Kravis Roberts & Co’s KKR Brickman Co-Invest LP.

With the nation’s second-largest private equity program, CalSTRS hiked its allocation target by 1 percentage point to 13 percent after an “exhaustive year-long asset and liability study,” according to a statement from the pension system last September.

It also cut its commitment to fixed income to “coax consistent long-term growth from a chaotic environment.” The allocation change amounted to an increase of about $1.7 billion for private equity.

CalSTRS has said it’s committed to building its co-investment capabilities to help save on performance fees.

CalSTRS stepped up its pace from the fourth quarter of 2012, when it committed $338 million to private equity, with a largest single commitment of $125 million to Blackstone Groups GSO Capital Solutions Fund II.