Louisiana State Plows $80M Into Two Funds

The $7.6 billion Louisiana State Employees Retirement System recently committed $40 million apiece to two funds, Newstone Capital Partners II and Drug Royalty II, a spokesperson told Buyouts.

Newstone Capital, which provides mezzanine capital to private equity sponsors, is targeting $900 million for Newstone Capital Partners II LP to create a diversified portfolio of mezzanine investments targeting larger mid-market issuers and focusing on principal preservation. The limited partner chose to invest with Newstone Capital after reviewing several other mezzanine funds including AEA Mezzanine Fund II, Audax Mezzanine Fund III and Kayne Anderson Mezzanine Fund I.

Inwest Investments’s Drug Royalty II, meantime, is a $500 million-targeted fund earmarked to aquire pharmaceutical royalty interests, which are streams of future cash flows tied to the sale of a product.

As of Sept. 30, 2009, Lousiana had hit its target allocation to private equity of 10 percent, at the center of its range of 7 percent to 13 percent.

The limited partner mostly commits to funds of funds managed by such firms as Adams Street Partners, HarbourVest, Mesirow Financial, Pantheon, Parish Capital, Pathway Capital Management, and Siguler Guff.