The $11 billion
With an actual allocation of 3.4% to private equity and a target of 6%, the state pension fund has plenty of room for more pledges.
“We have focused in several areas of the private equity market in sourcing ideas for investments this year,” said Smith, who added that the state pension fund has recently made two commitments, although he declined to disclose them until they close.
Last year, up to $20 million went to Pine Brook Road Partners for growth equity investments in the energy and financial services sectors; up to $25 million went to First Reserve XII, an energy-focused buyout fund; and up to $20 million went to Audax Mezzanine Fund III, a mid-market vehicle with an average investment size of $20 million.
Kansas commits to buyout, venture capital, growth equity, distressed debt, mezzanine debt, natural resources and secondary funds. The state re-started its private equity program in 2008 after hiring a non-discretionary private equity consultant, Sacramento, Calif.-based LP Capital Advisors. —Nancy Gordon
Arizona Public Safety outlines pledges
The $4.1 billion
“Our cost of capital has never been higher, so we see little reason to venture too far into the exotic,” Steed said.
Arizona Public Safety will opportunistically commit to firms “whose strategies are complementary and disciplined,” and that align their interests with those of their LPs, Steed said.
In 2009, the state retirement system committed up to $30 million to Drug Royalty II, which invests in pharmaceutical royalty streams, along with co-investment capital of up to $20 million. And up to $40 million went to OHA Strategic Credit Fund, which is earmarked for opportunities in stressed and distressed loans, bonds and other investments.
Last year, Arizona Public Safety raised its target to the asset class to 8%, with a range of 6% to 12 percent. The state pension fund’s actual allocation now stands at about 7%, said Steed.
The Arizona Public Safety Personnel Retirement System uses consultants StepStone Group for PE investments in the United States and South America and Albourne Partners for its global private equity investments. —Nancy Gordon
Michigan outlines pledges
On behalf of the State of Michigan Retirement Systems,
“The most interesting deals so far [this year] have been on the debt side,” said the spokesperson, “although this is changing as funds flow to this area and make it more competitive.”
The $47 billion State of Michigan Retirement Systems has a target allocation of 16% to the asset class. The allowable range extends from 10% to 17 percent.
About half the alternative portfolio, as of December, was committed to buyout funds, about 21% to special situation vehicles and about 10% to venture capital funds. The State of Michigan Retirement Systems also makes co-investments, which it has been doing since the early 1990s, said the spokesperson.
Michigan has previously backed Advent International, Glencoe Capital, Huron Capital Partners, The Riverside Co., Stockwell Capital (an adviser on co-investments) and Wind Point Partners. —Nancy Gordon