Louisiana Teachers’ pension goes large with $100 mln to American Securities

The $16.6 billion retirement system’s board approved more than $300 million for private equity and venture capital, including more than $50 million for investments in the energy sector and up to $150 million for venture capital and growth equity funds. 

American Securities set a $4 billion target for its seventh middle market private equity fund. The firm will make 10 to 15 investments through Fund VII, which it will use to acquire companies with enterprise values between $200 million and $1.75 billion, according to a Hamilton Lane report obtained through a public records request. American Securities expects to invest 75 percent of Fund VII in industrial and services businesses.

Louisiana Teachers’ invested in the firm’s previous fund, American Securities Partners VI, a $3.6 billion vehicle that closed in 2012.

In addition to its allocation to American Securities, Louisiana Teachers’ committed up to $50 million to The Carlyle Group-backed NGP Energy Capital Management’s NGP Natural Resources XI, an energy fund that Carlyle expects to close on its $5.3 billion hard-cap, co-CEO David Rubenstein said during an Oct. 29 earnings call.

Louisana Teachers’ also approved $2 million for a co-investment alongside The Blackstone Group’s first energy fund. Coleman declined to provide details about the deal.

Lousisana Teachers’ investment policy allows the retirement system to co-invest alongside its existing managers. The retirement system committed up to $100 million to Blackstone’s second energy fund in September. Blackstone set a $4 billion target for Blackstone Energy Partners II and expects to hold a final close in the first quarter of 2015, according to limited partnership documents obtained from San Francisco Employees’ Retirement System.

Louisana Teachers’ latest round of commitments included $150 million for venture capital strategies. The retirement system allocated $100 million for a Hamilton Lane-managed account that will invest in top tier venture fund managers, Coleman said. The retirement system committed $50 million to Hamilton Lane for a similar account last year.

The retirement system also committed up to $50 million to Insight Venture Partners’ ninth fund, a growth equity fund that will invest in software, software-enabled and Internet companies.

Louisiana Teachers’ held an 11 percent allocation to private equity and venture capital funds as of September 30, two percentage points below its 13 percent target, according to its website.