Illinois Teachers’ forms $600 mln strategic partnership with Greenspring

  • New fund-of-one gives pension control over venture program
  • Retirement system also backs Greenspring fund-of-fund
  • PE program valued at $5.4 bln

Teachers’ Retirement System of the State of Illinois formed a new $600 million strategic partnership with Greenspring Associates, a venture capital firm based in Owings Mills, Maryland, and Palo Alto, California, spokesman David Urbanek told Buyouts.

Greenspring, which already manages roughly $5.2 billion of committed capital, invests in VC funds and secondary transactions, in addition to taking direct stakes in venture-backed companies. The firm’s portfolio includes stakes in Alibaba and Grubhub, as well as investments managed by Accel Partners and Thoma Bravo.

Illinois Teachers’ structured the partnership as a “fund of one” and will “maintain more control over the venture capital investment decisions,” Urbanek said.

The separate account with Greenspring represents a new relationship for Illinois Teachers’. The system’s existing venture program includes commitments to funds managed by Battery VenturesLightspeed Venture Partners and Sofinnova Ventures.

The retirement system did not issue a request for proposals for its new VC separate account.

“TRS reviewed the products and strategies employed by a number of private equity firms before selecting Greenspring,” Urbanek said.

The $49.4 billion retirement system committed an additional $650 million to a fund-of-funds managed by Greenspring, he said.

Greenspring, led by Ashton Newhall and Jim Lin, could not be reached for comment.

Illinois Teachers’ also committed as much as $100 million to Clearlake Capital Group, which is in the process of raising as much as $3.5 billion or $3.6 billion for its latest flagship fund, sources have told Buyouts.

Clearlake’s previous fund was netting a 36.9 percent internal rate of return as of the end of last year, according to California Public Employees’ Retirement System.

At the end of the 2016 fiscal year, Illinois Teachers’ held 12.3 percent of its assets in PE, just short of its 14 percent target. The portfolio had a fair value of $5.4 billion.

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