California Public Employees’ Retirement System, under the microscope for the comparably high fees it pays on its alternative investments portfolio, hauled in $1.6 billion in private equity distributions in the year’s first quarter. It is more evidence that, while expensive, the asset class is paying off for the giant pension.
The Jordan Company played a leading role. The firm’s Resolute Fund II produced the highest distribution percentage (distributions as a percent of contributed capital) among buyout/corporate finance funds and the fourth-highest absolute distribution amount during the opening quarter of 2015. The 2008-vintage fund posted a distribution percentage of 32.2 percent and returned $55.5 million in that period.
Coming in second by distribution percentage was distressed credit-focused Castlelake with its maiden fund. The 2007-vintage pool posted a 25.7 distribution percentage. Taking the bronze was Riverwood Capital Partners’ 2010-inaugural fund, generating a 20 percent distribution percentage. Riverwood also had the highest IRR and investment multiple in our top-five distribution lists, sporting an impressive 29.9 percent IRR and 2.1x multiple.
The Carlyle Group’s Europe Partners III LP led the buyout/corporate finance portfolio in total distributions during the three month span, producing $74.8 million in the first quarter. Another European fund finished right behind it in second place. London-based CVC Capital Partners and its European Equity Partners Tandem Fund distributed $74.2 million. Carlyle Group had a second fund in the top-five funds by absolute distributions. Its fifth flagship fund, Carlyle Partners V, returned $64.8 million to CalPERS in 2015’s opening stanza.
All told, CalPERS’ private equity portfolio had about $56.5 billion in committed capital across 281 active funds as of March 31, 2015. Those active investments have a combined $47.2 billion drawn down and produced over $45 billion in realized returns.
Download the LP Scorecard table as a spreadsheet: CalPERS’s LP Scorecard Table