Louisiana Teachers’ commits $75 mln each to TPG, Oaktree funds

  • New Oaktree special situations fund raising as much as $1.75 bln
  • TPG targets $3 bln for new RE fund
  • Louisiana Teachers’ alternatives portfolio valued at more than $6 bln

Teachers’ Retirement System of Louisiana last week committed up to $150 million across two funds, allocating $75 million to vehicles managed by Oaktree Capital Management and TPG’s real estate arm.

The $20 billion system backed Oaktree’s latest special-situations fund, which is raising as much as $1.75 billion for control investments in mid-market companies, Buyouts reported late last year.

The special-situations team, led by Managing Directors and Co-Portfolio Managers Jordon Kruse and Matt Wilson, will use the fund to acquire the distressed debt, structured equity or direct equity of U.S.-based companies.

While Oaktree has managed special-situations funds for more than two decades, Oaktree Special Situations Fund II is only the second such vehicle led by Kruse and Wilson. The firm’s first fund, which closed on $1.4 billion in late 2015, was netting a 29.4 percent internal rate of return and 1.3x multiple as of Sept. 30, a Hamilton Lane report prepared for Louisiana Teachers’ shows.

Fund I is among the top quartile of distressed-debt performers, according to Hamilton Lane’s data.

Louisiana Teachers’ also backed TPG’s third real estate fund, which is targeting $3 billion. The real estate team is led by Kelvin Davis and Avi Banyasz.

The real estate group has invested across a wide range of properties over the years, a fund presentation included in Louisiana Teachers’ meeting materials says.

TPG plans to use the fund to target dislocations in the retail, single-tenant office and public markets.

TPG’s second real estate pool, which closed on more than $2 billion in 2015, was netting a 38.3 percent IRR as of Sept. 30. Fund I was netting a 25.3 percent IRR as of that date.

Louisiana Teachers’ alternative-assets and real-estate portfolio was valued at $6.1 billion as of March 31. The portfolio has netted a 10-year return of 8.28 percent.