- Kansas makes first-time commitment to buyout firm
- KPERS manages $14 billion in all investments
- Pension invested in no private equity in 2002-2006
KPERS, which manages about $14 billion for 281,000 active, inactive and retired members, voted March 14 to invest in the latest fund from the Los Angeles and New York-based mid-market shop that is focused on the consumer and distribution sectors. It is the first commitment by the pension system to Freeman Spogli.
KPERS also committed up to $40 million to CBRE Strategic Partners U.S. Value Fund 7, a real estate vehicle. The fund family has invested in institutional-quality properties in highly rated major metropolitan areas of the U.S.
Freeman Spogli’s current fundraising effort comes at an active time for the firm. So far this year, Freeman Spogli portfolio company First Watch Restaurants added Arizona-based, 20-restaurant chain Good Egg. The firm also made a minority investment in Arhaus LLC, a home furnishings retailer. Last May, Freeman Spogli portfolio firm Boot Barn bought Baskins stores, a Houston-based retailer with 30 locations.
The predecessor of FS Equity Partners VII LP, FS Equity Partners VI LP, closed in 2011 with $735 million in commitments, short of its $1 billion goal, at a time when fundraising efforts struggled in the years after the 2008 financial crisis.
Among past private equity investments by KPERS, the pension system last year pledged $20 million to Platinum Equity III LP.
After making no private equity commitments from 2002 to 2006, KPERS had committed more than $400 million to nearly 20 funds between 2007 and the middle of 2011. Among those, the pension system committed $25 million each to Apollo Investment Fund VII LP, EnCap Energy Capital Fund VIII, TPG Growth Fund II and Centerbridge Capital Partners II LP, among others.
Freeman Spogli’s roster of LPs includes the Connecticut Retirement Plans and Trust Funds, Florida State Board of Administration and Massachusetts Pension Reserves Investment Management Board.
New York State Common Retirement Fund’s $85 million commitment to the 1997 vintage FS Equity Partners IV earned an IRR of 12.9 percent as of Dec. 31, 2012, according to data compiled by Buyouts.
MassPRIM earned an IRR of 16.3 percent for its investment in the 1993 vintage FS Equity Partners III LP, according to data compiled by Buyouts.
Freeman Spogli traces its roots to 1983 when it was founded by Bradford Freeman and Ronald Spogli. The firm now employs more than 25 people and has invested more than $3 billion in 49 companies, according to the firm’s website.