Chicago Teachers’ commits $40 mln to emerging managers, including first-timer P4G

  • Chicago Teachers’ has 5 pct target for PE
  • $10.8 bln pension began the search in January
  • More than 40 pct of assets managed by firms owned by minorities, women, persons with disabilities

Chicago Teachers’ Pension Fund committed $40 million to four emerging managers, adding to the number of minority-owned and women-owned firms in its PE portfolio.

The $10.8 billion pension fund committed $10 million each to AUA Private Equity Partners, Estancia Capital Management, P4G Capital Associates and PiPV Capital.

AUA and Estancia qualify as Hispanic-owned businesses, P4G is a woman-owned manager and PiPV is an African-American-owned manager.

PiPV is targeting $500 million to focus on pharmaceuticals and biotechnology. Its founders have worked together since 2000, when they formed as a team at GlaxoSmithKline Ventures.

AUA is targeting $300 million for its second fund, focusing on consumer products and consumer services, as well as Hispanic-oriented or family-owned businesses.

AUA already has a big Illinois pension among its LPs for Fund I and Fund II, with a commitment from Illinois Municipal Retirement Fund.

Estancia is targeting $300 million for its second fund and will pursue investments in small- to lower-middle-market financial-services companies, including asset management and wealth management firms.

P4G, targeting $200 million for its debut fund, focuses on manufacturing, business services and industrials.

Chicago Teachers’ has a 5 percent target to PE, with an actual allocation of 2.8 percent as of July 2018.

Illinois law requires the state’s pension funds to attempt to allocate 20 percent of their assets to businesses owned by women, minorities or people with disabilities. Chicago Teachers’ has allocated $4.5 billion, or 42 percent of total fund assets, to such firms, according to its January 2019 report on diversity.

Chicago Teachers’ selected the four firms after launching a request for proposals in January. At the time, the pension said it was open to hiring one or more managers. Chicago Teachers’ consultant, Callan Associates, assisted in the search.

The pension recently conducted a separate search for Africa-focused PE opportunities, and committed $10 million each to Advanced Finance and Investment Group and Development Partners International in January.

Action Item: Find out more about Chicago Teachers’ Pension Fund investments here