Kentucky pledges $100 mln to Deutsche Bank secondaries

  • System commits to Deutsche Bank, Crestview
  • Kentucky has a 10 percent target for PE
  • Commitment to Vista’s oversubscribed fund

The commitment to Deutsche Bank’s third secondary fund, which is reportedly seeking $1 billion to acquire private equity fund stakes held by other investors, will come from the Kentucky’s $4.1 billion insurance fund.

The insurance fund had a 5.84 percent allocation to private equity as of July 31, well below its 10 percent target. The commitment to Deutsche Bank’s latest secondaries vehicle will allow the insurance fund to develop exposure across different vintage years, thereby avoiding “chunky vintages,” Peden told Buyouts.

Deutsche Bank’s secondaries team did not respond to a request for comment. 

Crestview Partners is targeting $3 billion for its latest private equity fund. In early September, sister website peHUB reported that Crestview had raised around $2.4 billion for Fund III and expects to hold a final close later in the fall.

Fund III will be used to make opportunistic and value-oriented investments in U.S. businesses that operate in out-of-favor industries, according to a Portfolio Advisors memo for the Pennsylvania Public School Employees’ Retirement System. The fund will invest $100 million to $350 million per deal, with a focus on the media, financial services, healthcare and energy sectors.

Pennsylvania Public School Employees’ committed up to $150 million to Fund III. A Crestview spokesman declined to comment.

Kentucky also approved a $50 million commitment to Vista Equity Partners’ latest flagship fund. It is unclear whether the retirement system will ultimately invest in Vista Equity Partners Fund V as the fund is oversubscribed, Peden said.

Kentucky’s $11.7 billion pension fund, which also has a 10 percent private equity target, had a 10.11 percent allocation to the asset class as of July 31. The blended investment portfolio of Kentucky Retirement Systems’ pension and insurance funds was roughly $14.8 billion as of July 31, according to its most recent investment report.