Pension System: New York State Common Retirement Fund
Pension Assets: $140.3 billion (Dec. 31, 2011)
Private Equity Assets: $13.9 Billion (June 30, 2011)
Private Equity Allocation: 9.5% of Assets (June 30, 2011)
Target PE Allocation: 10%
Chief Investment Officer: Marjorie Tsang (Interim)
The New York State Common Retirement Fund made a series of four private equity commitments, together amounting to more than $400 million.
The biggest commitment was for $150 million to the debut fund from Searchlight Capital, which peHUB, the Buyouts sister publication, reported would be targeting $750 million. If the fund were to close at that target level, the pension’s weighting would be an unusually high 20 percent of assets.
Searchlight Capital, a buyout firm that specializes in media, telecom and financial services, was founded by Eric Zinterhofer, a former co-head of media and telecom at Apollo Global Management, Oliver Haarmann, a former partner at Kohlberg Kravis Roberts & Co. and Erol Uzumeri,who previously headed up private equity at the Ontario Teachers’ Pension Plan.
The second-biggest commitment by New York Common was for $120 million to ACON Investments’s ACON Equity Partners III LP, a fund with a $600 million target, according to a report in Buyouts late last year.
Similar to the Searchlight Capital pledge, the ACON investment would amount to 20 percent of the fund’s overall assets, unusually high in the world of private equity.
ACON, which reportedly counts TPG’s David Bonderman among its investors, has an unusual hybrid of strategies, investing in energy and energy services and companies that serve the U.S. Hispanic population.
New York Common has previously invested with the firm, as has the California State Teachers Retirement System. ACON’s Fund II has returned a 22 percent IRR, according to CalSTRS data from March 31, 2011.
The third biggest commitment from the pension was for $119 to Hony Capital’s Hony Capital Fund V LP, a $2.4 billion Chinese buyout fund that closed in December, 2011. The fund is the largest buyout fund ever raised by a Chinese-based firm.
The fund’s strategy is to focus on reforming some of China’s state-owned enterprises, and also to make additional investments in growth capital opportunities. This is New York Common’s first investment in a Hony Capital fund.
Finally, the pension made a $16 million commitment to Access 2012 LP, a fund pool arising from the pension’s Access/NY European Middle Market Buyout Fund II Fund of Funds.