LP Scorecard: Blackstone IV Is San Diego’s Shining Star

The $8.4 billion pension fund is also reaping the rewards from turnaround funds, special situations funds and energy-focused funds, which together take three of the top ten spots in the top-10 scorecard below.

San Diego CERA, which has a 10 percent target allocation to private equity, has about 3.7 percent ($333 million) of its fund invested in private equity; it is on the hook for an additional approximate 7.8 percent ($704 million) in unfunded capital commitments. Altogether the pension fund has backed some 64 private equity funds spanning vintages 1997 to 2012. It’s a buyout-heavy portfolio that includes commitments to funds managed by Bain Capital, EQT, HarbourVest, Hellman & Friedman Capital Partners, Oak Hill Capital, Thomas H Lee and TPG Partners.

The total private equity portfolio has returned over 11 percent net of fees per annum over the life of the portfolio. Distress and special situations vehicles beat that, generating an IRR of 12 percent for the pension fund; buyouts and growth funds generated an IRR of 11.5 percent as of March 30, 2012.

Vintages in the top-10 performing funds span from as mature as the 1997 Capital International PE Fund III buyouts and growth fund, which generated a 22.8 percent IRR in eighth place, to as young as the $820 million 2009 Kayne Anderson Energy Fund V (QP) LP which has realised a 26.7 IRR in just three years and comes in fifth place in this top ten.

High-profile investments from the number one $6.5 billion Blackstone Capital Partners IV fund include German communications and media group Kabel BW GmbH; Cineworld Cinemas; energy group Sulo; Southern Cross Healthcare Group and glass and plastic products manufacturer Gerresheimer.

Cerberus Institutional Partners Series 2, a 2001 vintage special situations fund, comes in second place with a 29.1 percent IRR. That fund raised just over $1 billion. Pennsylvania State Employees’ Retirement System is also an investor in the fund.

And Oaktree Capital Management’s $2.1 billion OCM Opportunities Fund IV, also a 2001 distress and special situations fund, comes in third place, posting a 28.2 percent IRR. Washington State Investment Board is also an investor in that fund.

Energy makes its first appearance in fourth place in this top ten with the 2006 EnCap Energy Capital Fund VI which raised $1.5 billion and generated an IRR of 27.8 percent for the period. Investments from that fund include PetroEdge Resources and Tracker Resource Development.

Last year the pension fund committed to Baring Asia PE Fund V; Blackstone Capital Partners VI; Brazil AgriLand Fund, Capital International PE Fund VI; Denham Commodity Partners Fund VI; EQT VI (No.2) Limited Partnership; Gores Small Capitalization Fund LP; Hellman & Friedman Capital Partners VII; OCM European Principal Opportunities III and Taurus Resources Fund No. 2. As of March 30, 2012 the pension fund this year had committed to RMF 2 Feeder Fund LP

Scroll down the list to find out more about San Diego CERA’s top 10 performers.

10. TA Subordinated Debt Fund I LP

Strategy: Buyout & Growth

Vintage: 2000

IRR: 15.9 percent

 

9. OCM Opportunities Fund VII B

Strategy: Distress & Special Situations

Vintage: 2008

IRR: 18.4 percent

 

8. Capital International PE Fund III

Strategy: Buyout & Growth

Vintage: 1997

IRR: 22.8%

 

7. TA IX

Strategy: Buyout and Growth

Vintage: 2000

IRR: 24.8 percent

 

6. EnCap Energy Capital Fund VII

Strategy: Energy

Vintage: 2007

IRR: 25.9 percent

 

5. Kayne Anderson Energy Fund V (QP) LP

Strategy: Energy

Vintage: 2009

IRR: 26.7 percent

 

4. EnCap Energy Capital Fund VI

Strategy: Energy

Vintage: 2006

IRR: 27.8%

 

3. OCM Opportunities Fund IV

Strategy: Distress & Special Situations

Vintage: 2001

IRR: 28.2 percent

 

2. Cerberus Institutional Partners Series 2

Strategy: Distress & Special Situations

Vintage: 2001

IRR: 29.1 percent

 

1. Blackstone Capital Partners IV

Strategy: Buyout and Growth

Vintage: 2003

IRR: 37.9 percent