Unlike last year, when many endowments and foundations were on the sidelines, if not outright selling, at least a few say they’ll make pledges this year to the asset class.
Still, we’re not talking especially big numbers: Three of these investors, Alfred I. duPont Testamentary Trust, Ball State Foundation, and Bryn Mawr College, collectively appear to be good for around $50 million in pledges this year—the size of a single, respectable commitment to mega-funds of yore.
The $4 billion Alfred I. duPont Testamentary Trust, the investment vehicle that funds The Nemours Foundation, intends to commit roughly $35 million to private equity in 2010, Director of Private Equity Michael Beblo told Buyouts. The LP, whose target allocation to the asset class is 12 percent, commits to about eight to 10 funds each year, with commitment sizes ranging from $3 million to $10 million. The trust has made commitments to more than 100 private equity funds since 2000 and has supported Flybridge Capital Partners, Golub Capital Partners, Lightspeed Venture Partners, and The Riverside Company, among others.
Although the $850 million Bryn Mawr College has reached its 8 percent target to private equity, Chief Financial Officer and Treasurer John Griffith still intends to commit $10 million to distressed-for-control and small and mid-cap buyout funds this year, he said. The college has supported Commonfund Capital, a funds-of-funds manager.
The $150 million Ball State Foundation will likely pledge a total of $4 million to $5 million this year, which will go to a couple of commitments. Some of the contenders are buyout, venture capital, mezzanine, distressed, and secondary funds, or a fund of funds that combines some of these strategies, said Tom Heck, CIO. As of December 31, the total value of the college’s private equity investments was $148 million. The value of the called private equity capital was $27 million, and the LP has outstanding commitments of $23 million. It has a long-term allocation to private equity of 15 percent.
Lehigh University’s Chief Investment Officer Peter Gilbert told Buyouts that the school invests in private equity on an opportunistic basis. “We want to make a few select investments to the best funds,” said Gilbert. “If we cannot find them or access them, we will not make any investments.” For 2010, the LP may invest anywhere from zero to about $40 million, he added. Lehigh University’s $980 million endowment fund has a current allocation to private equity of about 9 percent and a target allocation of 15 percent, with a range of 5 percent to 20 percent. Lehigh University anticipates reaching its goal for the asset class within the next five years.
Purdue University currently has made enough commitments over the past five years to reach its policy target. To maintain the exposure, “additional commitments will need to be made if and when distributions pick up,” said Scott Seidle, senior director of investments, adding that the $1.7 billion LP is still in the planning process for 2010 and is not looking to ‘fill’ a specific amount. Purdue has a target allocation of 10 percent to private equity, with a range of 5 percent to 15 percent.
The $10 billion Ford Foundation has 14 percent of its portfolio invested in private equity, said a spokesperson. And according to its 2009 annual report, the foundation has committed to additional funding of $1.2 billion in private equity and other investment commitments. Clearly the foundation has a continuing interest in the asset class since in July it hired Sherif Nahas, previously with the University of Virginia Investment Management Co., as head of private equity and natural resource investments. He succeeded Eric Doppstadt, who was promoted to chief investment officer.