A decision is expected in December, and the contract is expected to start no later than March.
Connecticut seeks one or more firms to provide investment consulting services for a five-year term. The consultant would work with the treasurer and chief investment officer of the funds to develop a co-investment program in venture capital, leveraged buyouts, special situations, mezzanine capital and international private equity. Much of the money would eventually wind up in the hands of Connecticut-based fund managers and Connecticut-based businesses.
The state pension funds have a target allocation of 11% for private equity, which includes corporate finance, venture capital, private debt vehicles and direct co-investments. The state steers about 60% to 90% of its private equity commitments to corporate finance and buyout funds, and the rest to venture capital funds. To gain exposure to certain markets, such as venture capital, small buyout and clean technology, the state invests through funds of funds.
The Connecticut Retirement Plans and Trust Funds was one of the first public plan sponsors to create a private equity allocation and, as of March 2008, had about $2.5 billion in capital committed to the asset class. Its goal is to commit $600 million to $700 million yearly to private equity, a pace intended to reach the 11% target allocation in a few years. The pension fund has made more than $1.2 billion in private equity commitments to women- and minority-owned firms.
The state continues to seek a chief investment officer to replace Susan Sweeney, who left in May 2007, according to spokesperson Christine Palm. In June of 2007, Lee Ann Palladino was appointed acting CIO.
Connecticut Retirement Plans and Trust Funds is made up of six state pension and eight state trust funds that cover 160,000 teachers, state employees and municipal workers as well as academic programs, grants and other state initiatives. —Nancy Gordon
Vermont may include PE in state program
The $3.3 billion
The committee invests money on behalf of three state pension funds: the
There are no stated limits to private equity investments in the ETI program, beyond the 2% to 3% allocation limit to alternative investments set for the participating retirement systems. The private equity allocation target is not fully funded for any of these systems. Allocations to recipients may rise and fall over time over time.
Vermont Pension Investment Committee expects to award commitments to buyout firms, venture capital firms, securities investment managers, financial institutions, insurance companies, real property investment managers, not-for-profit corporations and foundations. The goal of the program is to help finance small and medium-sized businesses in the state, and to provide housing for poor and middle-income people. The state seeks a market rate of return commensurate with the assumed risk. —Nancy Gordon
The $10.7 billion
The board has directed Hawaii’s discretionary adviser,
June hopes to double the pension fund’s exposure to private equity over the next five years to 7%, but the board has not yet approved such an increase. “We are considering it later this year or early next year,” June says. Such a move would likely mean ratcheting up the state’s exposure to non-U.S. private equity and real estate in 2009.
Funds backed by the State of Hawaii Employees’ Retirement System in 2007 include Battery Ventures VIII, Canaan VIII, Eos Capital Partners IV, Green Equity Investors V, JMI Equity Fund VI, Kelso Investment Associates VIII, KKR 2006 Fund, Oak Hill Capital Partners III, The Resolute Fund II, Thomas H. Lee Equity Fund VI, and Warburg Pincus Private Equity X.
June became the pension fund’s CIO in January. He previously served as a private equity investment officer for the
U.S. LPs look to Italy
Two U.S. pension plans chose an Italy-specific fund to receive private equity investment slugs in July.
The $16 billion
The commitments help illustrate growing limited-partner interest in country-specific buyout funds. “Over the last several years the SERS board has been moving across the entire fund to achieve greater global diversity and international exposure,” says Robert Gentzel, spokesperson for Pennsylvania SERS. “The Clessidra fund will focus on investments in the Italian market and thus will help broaden SERS’ international private equity exposure.”
Clessidra SGR raised $1.1 billion for its first buyout fund, which closed in 2005. At the time, it was Italy’s largest buyout fund. Clessidra Capital Partners II was established in January 2008, according to a regulatory filing, and has a minimum investment of $40,000.