Mass PRIM OK’s investments in GTCR, American Securities, HIG funds

  • Mass PRIM make fresh allocations to GTCR, American Security Funds
  • $54B fund continues relationships with firms
  • Also pledges to ACON, WestView, Thoma Bravo, HIG funds

The most recent allocations saw Mass PRIM pledge up to $180 million for GTCR Fund XI and a maximum of $100 million for American Securities Opportunities Fund III, according to Oct. 18 meeting minutes obtained by Buyouts.

Michael Bailey took the reins as senior investment officer and director of private equity for Mass PRIM earlier this year, after working at HighVista Strategies. The post was previously held for several years by Wayne Smith, who left in July 2011.

GTCR Fund XI, aimed at platform investments of about $100 million to $500 million in the middle- and upper-middle U.S. buyout market, has a target size of $3.25 billion and a hard cap of about $3.75 billion, Mass PRIM said.

“GTCR’s consistently strong fund performance through several market cycles evidences its ability to generate attractive returns using its unique investment approach,” according to the minutes. “In addition, the GTCR team is highly talented, has strong domain expertise and deep networks and has had a long-standing relationship with PRIM.”

Mass PRIM has had a relationship with GTCR since 1998 and has contributed a total of $443 million to funds managed by the Chicago-based firm, according to the minutes.

Other pension funds already committing to GTCR Fund XI include the San Francisco Employees’ Pension Retirement System and the Maine Public Employees Retirement System.

Meanwhile, American Securities Opportunities Fund III will make distressed investments in a broad range of securities of middle-market companies located primarily in the U.S., according to Mass PRIM. The fund is seeking commitments of $750 million, with a hard cap of $1 billion.

Mass PRIM said it’s had a relationship with American Securities since 2008 and has committed a total of $225 million in funds that the firm manages.

Other limited partners taking part in American Securities Opportunities Fund III include the Los Angeles City Employees’ Retirement System.

Mass PRIM’s other 2013 commitments include $30 million to HIG Capital Partners V, a lower-middle-market buyout fund that hit its $1 billion hard cap earlier this year.

The pension fund also made a $50 million commitment to KPS Special Situations Fund IV, a $3.5 billion middle-market fund focused on constructive investing in restructurings, turnarounds and other special situations.

Mass PRIM committed $30 million to WestView Capital Partners III, a growth equity fund, and $25 million to Thoma Bravo Special Opportunities Fund I, a sector-focused middle-market buyout fund.

The pension fund pledged $26 million to HIG Europe Capital Parters II, a middle-market buyout fund in Europe; and $192 million to CVC Capital Partners VI, a fund aimed at large buyout deals in Europe.

The pension fund already had relationships with HIG, KPS, CVC, WestView and Thoma Bravo.

In April, Mass PRIM committed $50 million to ACON Equity Partners III, a middle-market buyout fund that announced its close on June 7 with total commitments topping $751 million. The pension fund did not have a prior relationship with ACON Equity.

Mass PRIM ranked first among public pension funds with the best combined five- and ten-year annualized private equity returns, according to a recent report by the Private Equity Growth Capital Council.

The $42 billion Los Angeles County Employees’ Retirement Association came in second place, followed by the $115.9 billion Teacher Retirement System of Texas..

With an IRR of 48 percent as of June 30, the 2001 vintage First Reserve Fund IX ranked as the top-performing mega buyout fund among some 40 investments by Mass PRIM, which has been pledging to private equity since 1978.  Blackstone Capital Partners IV 2003 vintage placed second with a 37.24 percent IRR for the period, followed by the 2000 vintage Hellman & Friedman Capital Partners IV fund, which took third place with a 34.94 percent IRR.

(Correction: The name American Securities has been corrected in the headline.)