Louisiana Teachers’ backs Silver Lake, EnCap

  • Louisiana Teachers’ commits $75 mln to each fund
  • Silver Lake targeting $12.5 bln, EnCap $6.5 bln
  • Louisana Teachers’ PE portfolio $2.57 bln, 15 pct of assets

Teachers’ Retirement System of Louisianaapproved a pair of commitments to new flagship funds from Silver Lake and EnCap Investments at its Feb. 2 meeting.

The $17.1 billion public retirement system’s board approved $75 million commitments to each fund, Deputy Chief Investment Officer Maurice Coleman said in an email. The commitments have not been finalized.

Silver Lake set a $12.5 billion target for its newest flagship fund, according to a Hamilton Lane report prepared for Louisiana Teachers’. Silver Lake Partners V will make 15 to 20 investments, typically targeting companies with enterprise values exceeding $500 million.

The firm may hold a first close on as much as $12 billion as early as March, Buyoutsreported in January. Fund V is likely oversubscribed, three limited partners said.

The firm’s previous fund, which raised $10.3 billion, was netting a 29.8 percent internal rate of return as of June 30, the Hamilton Lane report shows. Fund III, which Hamilton Lane pegged as a $9.4 billion 2007 vintage, was netting a 17.6 percent IRR as of that date.

EnCap set a $6.5 billion target for its latest flagship fund, its 11th since its inception in 1988, the Hamilton Lane report shows. The target mirrors the amount EnCap raised through its previous fund in 2015.

EnCap X has yet to deliver meaningful returns, but EnCap’s $5.2 billion 2013 vintage fund was netting a 14.2 percent IRR as of Sept. 30, according to Hamilton Lane. In aggregate, EnCap’s flagship funds have delivered a 17.9 percent IRR and 1.2x multiple as of that date.

The firm will use Fund XI to provide 20 to 25 oil-and-gas management teams with investment capital, typically deploying $200 million to $500 million of equity per deal, the Hamilton Lane report shows.

Louisiana Teachers’ valued its PE portfolio at $2.57 billion, or roughly 15 percent of its total assets, as of Dec. 31. The system has a 22 percent target allocation to private equity, which includes its allocations to buyout, venture capital, mezzanine and distressed-debt funds.

Action Item: For more about Louisiana Teachers’, visit www.trsl.org