Louisiana Teachers’ commits $300 mln to private funds

Teachers’ Retirement System of Louisianaapproved up to $300 million of new commitments to private equity and infrastructure funds at its meeting last week, Deputy CIO Maurice Coleman told Buyouts in an email.

The four commitments are subject to the negotiation of terms, Coleman said.

The two largest commitments went to new flagship funds raised by American Securities and Thomas H. Lee Partners, Coleman said. The $19.6 billion retirement system plans to commit up to $100 million to American Securities Partners VIII and Thomas H. Lee Equity Fund VIII.

American Securities is targeting $6 billion for its eighth buyout fund, a Hamilton Lane report on the proposed commitments says. The firm will make 13 to 16 investments, typically in companies valued between $500 million and $1.5 billion.

American Securities’ previous fund, which hit its $5 billion hard cap in 2015, was netting a 22.6 percent internal rate of return through Sept. 30, the Hamilton Lane report says. Hamilton Lane has all three of the firm’s most recent flagship funds netting top-quartile returns for their respective vintage years.

Thomas H. Lee, which is targeting $3 billion, plans to continue its strategy of acquiring mid-market companies based in North America, the report says.

The firm’s performance has improved sharply in recent years since it refocused its investment strategy on middle-market buyouts, the Hamilton Lane report says. Thomas H. Lee’s most recent fund, which closed on $2.6 billion in 2016, is marked as netting 63.1 percent IRR and 1.5x multiple through mid-2017.

Louisiana Teachers’ also committed $50 million each to Bernhard Capital Partners Management’s second fund, targeting $1 billion, and LS Power Equity Partners IV.

Bernhard Capital Partners specializes in acquiring companies in the energy, industrial and infrastructure services industries. Its debut fund, which founders Jim Bernhard, Jeff Jenkins and George Bevan launched after selling Shaw Group for $3.3 billion in 2013, posted a 23.8 percent IRR through Sept. 30.

LS Power Equity Advisors is targeting $2 billion for its new energy-infrastructure fund. All three of the firm’s previous funds are notching top-quartile returns, per Hamilton Lane’s analysis.

Louisiana Teachers’ $19.6 billion public pension held more than a quarter of its assets in alternative assets and real estate as of Nov. 30. The $5.8 billion portfolio has delivered a 7.82 percent return over the previous 10 years, net of fees.

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