Pension: New York State Common Retirement Fund
Assets Managed: $159 Billion (June 30, 2013)
PE Assets Managed: $13.8 Billion (March 31, 2013)
PE Allocation / Target: 8.6% / 10% (March 31, 2013)
Chief Investment Officer: Vicki Fuller
The New York State Common Retirement Fund, which oversees $159 billion in assets, committed just under $350 million to a pair of Europe-based private equity funds in July, according to Eric Sumberg, spokesman for Thomas DiNapoli, the New York State Comptroller and sole fiduciary of the state’s biggest pension. The pension had $13.8 billion invested in private equity, about 8.6 percent of its assets, as of March 31. That is slightly below the pension’s 10 percent private equity target.
The larger of the two commitments was 250 million euros ($328 million) for the latest flagship fund from CVC Capital Partners, the big London-based sponsor. That fund, CVC European Equity Fund VI LP, closed in July with nearly $14 billion in commitments, making it the second-largest private equity fund to be raised since the start of the financial crisis. (The top honor goes to Blackstone Capital Partners VI LP, which raised $16 billion, but took four years to do it.)
Founded in 1981, CVC Capital is known for buying such high-profile companies as Formula One Racing, Samsonite Luggage and BJ’s Wholesale Club. Just recently, it began negotiations to buy the European operations of The Campbell Soup Company. Since its founding, CVC has raised more than $50 billion from investors.
Fund VI has raised funds from a slew of big public pensions. The New York City Retirement System contributed $500 million; the Minnesota State Board of Investment pledged 250 million euros; the New York State Teachers’ Retirement System committed 200 million euros; the Oregon Investment Council committed $200 million; the New Jersey Division of Investment committed 100 million euros; the Maine Public Employees Retirement System pledged 60 million euros, the Kentucky Retirement Systems committed 50 million euros, and the Nebraska Investment Council committed 20 million euros.
The California Public Employees’ Retirement System, which has been an investor in CVC’s first five funds (but has not yet publicly announced a commitment to Fund VI), reported that the firm’s previous fund, the 2008-vintage Fund V, had delivered a net internal rate of return (IRR) of 8.9 percent, along with a net 1.2x investment multiple, as of December 31, 2012. The 2005-vintage Fund IV performed better, delivering a net IRR of 17.4 percent and a net return multiple of 1.8x, according to CalPERS.
The pension’s second commitment was 15 million euros to Invision Private Equity’s Invision V LP. This fund closed in July with 285 million euros, exceeding the fund’s 250 million euros target.
The firm, which is based in Zug, Switzerland, focuses on small and mid-market buyouts in Europe, particularly in the German-speaking countries of Germany, Austria and Switzerland.
New York Common’s commitment was made from its Access/New York European Middle Market Buyout Fund II LP, a captive fund of funds managed by Access Capital Partners, a European fund of funds firm based in Paris.
Invision’s previous fund, Invision IV LP, closed in 2008 after the firm raised 185 million euros. Founded in 1997, Invision is led by Frank Becker, its managing partner and board chairman.