The new allocation expands TRS Illinois’ emerging managers program, which previously directed $125 million annually to emerging firms specializing in public equity investing. Under the newly expanded program, TRS Illinois expects to commit $10 million to $25 million per fund, resulting in three to five new relationships per year across buyouts, mezzanine and venture capital, says Eva Goltermann, public information officer for the $41 billion state pension fund.
The Springfield, Ill.-based limited partner decided to expand the program beyond stocks because the investment team believed it was missing out on chances to get in on the ground floor with new alternative-asset management shops. The new allocation should allow TRS Illinois to back spin-outs from proven firms and pay extra attention to firms owned by minorities and women, Goltermann says.
“The whole point is we’re looking to find the next generation of top-tier managers,” she says. TRS Illinois typically commits $75 million to $100 million per LBO limited partnership, a commitment range that’s well in excess of what most emerging fund managers could absorb from a single backer.
TRS Illinois’ staff will supervise the selection of fund commitments. The pension fund will also receive some assistance from
JPMorgan wins $150M LACERA mandate
The $42 billion
JPMorgan declined to comment.
The limited partner plans to create a discretionary separate account to invest $150 million over three years, says LACERA spokesperson Christopher Wagner. JPMorgan will identify buyout and venture capital emerging manager investment opportunities, committing no more than $50 million for LACERA to limited partnerships in each 12-month period.
The minimum size of each investment is $5 million, with a maximum size of $20 million. Buyout funds must be between $100 million and $750 million in size, and venture funds are limited to those between $100 million and $300 million. Vehicles must be the GP’s first, second or third funds.
Historically, the emerging manager program has focused on U.S. funds.
LACERA’s board recently adopted a new private equity program structure, relying on discretionary managers to gain exposure to areas of the market that are difficult to access, such as small to mid-sized corporate finance funds and emerging managers. —Nancy Gordon
MassPRIM, which is forecasting double-digit returns in private equity for this year, voted to put $675 million into the funds.
Four funds will each receive $100 million: Tanaska Power Fund II, Quantum Energy Partners V, TCW Crescent Mezzanine Partners V and Avenue Europe Special Situations fund.
Onex Partners III will receive $150 million, American Securities Fund V will receive $75 million and Thoma Bravo IX will receive $50 million.
Like other investors, the Massachusetts fund has been hit hard by recent market turmoil and lost 1.53% this year. Bets on U.S. stocks dragged performance down most sharply as these investments lost the fund 6.43 percent. —Reuters