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Kansas revives Apax relationship after 15 years

  • Kansas previously committed to Apax’s 1999, 2001 funds
  • Pension sees $400 mln to $500 mln of commitments this year
  • Kansas holds 4.1 pct of its assets in PE

Kansas Public Employees’ Retirement System revived a long-dormant relationship with Apax Partners in May when it approved a $75 million commitment to Apax IX, which is targeting $7.5 billion for investments in global buyouts.

Kansas approved the commitment at its May board meeting, Communications Officer Kristen Basso told Buyouts in an email.

The $16.8 billion pension system last invested in Apax Partners’ 2001 vintage fund, Apax Europe V, a 4.4 billion euro ($4.91 billion) vehicle. Kansas is also an LP in the firm’s 1.8 billion euro 1999 vintage fund.

Apax Europe V netted a 36.2 percent internal since inception as of Dec. 31, according to Washington State Investment Board documents. Fund IV netted a 7.16 percent IRR and 1.3x multiple as of the same date.

Apax declined to comment.

Kansas’s previous commitments to Apax are part of a legacy portfolio of 1997-2001 vintage funds, all of which are exiting their remaining holdings, according to the pension’s annual report. Kansas valued the legacy portfolio at $22 million as of Dec. 31.

Kansas exceeded a 5 percent allocation cap for the asset class in 2001, which prompted the pension to halt the program for around six years. The pension rebooted its PE program in 2007 and gradually scaled up its pace of commitments over time.

Kansas plans to commit $400 million to $500 million to the asset class as it works its way toward an 8 percent long-term asset-allocation target. The retirement system will likely make five to seven fund commitments this year, according to pension documents.

As of March 31, Kansas held 4.1 percent of its assets in private equity strategies. Some 60 percent of its exposure was in buyouts, with the rest committed to venture capital, growth and special-situations funds.

Action Item: Kansas’s most recent annual report: http://bit.ly/1UuUmS8