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Commitment to Hellman & Friedman is CalPERS’ biggest of year

  • CalPERS commits $500 mln to Fund VIII
  • Strong demand prompts Hellman to cut some commitments
  • CalPERS also commits to Centerbridge

The California Public Employees’ Retirement System made its largest fund commitment of the year in October, a $500 million stake in Hellman & Friedman’s eighth flagship fund, according to materials released in advance of the retirement system’s Dec. 15 meeting.

Hellman & Friedman Capital Partners VIII closed on $10.9 billion in November. Strong demand pushed the buyout fund well past its $8.9 billion target and forced the firm to cut back some investors’ preferred commitment amount.

CalPERS is also an investor in Hellman & Friedman’s second, fifth, sixth and seventh flagship funds. Its largest commitment to the firm, at $600 million, went to Hellman & Friedman Capital Partners VI, an $8.4 billion 2007 vintage that generated a 1.7x multiple and 12.4 percent net IRR through March 31, according to CalPERS.

CalPERS’ $500 million commitment to Hellman & Friedman is significant in that it is the system’s largest commitment to a traditional private equity fund this year. CalPERS also committed $500 million to a separate account with Sankaty Managed Account (CalPERS) Investors LP, which it closed in July. CalPERS did not make additional information about the Sankaty Advisors account available.

The $295.7 billion retirement system also disclosed a $150 million commitment to Centerbridge Capital Partners III in its Dec. 15 meeting materials. Centerbridge Partners closed its third flagship fund on $6 billion in October.

CalPERS held a 10.5 percent allocation to private equity as of Oct. 31, according to meeting materials. The retirement system is slightly above its 10 percent strategic target for the asset class.