New York State Teachers’ inks more than $1.5 bln in PE commitments

  • New commitments include $600 mln separate account with HarbourVest
  • Linden, Siris, Thoma Bravo among commitments
  • PE program netting a 12.2 pct IRR

New York State Teachers’ Retirement System allocated more than $1.5 billion to private equity commitments in the fourth quarter, including $600 million to a separate account with HarbourVest Partners.

The HarbourVest commitment will be allocated over three years in separate tranches, documents in the retirement system’s January meeting materials show.

NYSTRS’s and HarbourVest plan include both passive and active co-investment strategies with “a select subset” of the retirement system’s best managers, which should boost its ability to access more deals in an efficient and cost-effective manner, according to materials sent by New York State Teachers’ Retirement System.

The retirement system had committed to at least nine funds managed by HarbourVest through mid-2017, including co-investment vehicles, according to its most recent annual report.

HarbourVest did not respond to requests for comment.

The retirement system also committed more than $900 million across nine other funds in Q4, including $150 million allocations with new flagships being raised by technology specialist Siris Capital and Patria Investimentos, a Latin American PE firm.

Siris, which is raising $3 billion with a $3.5 billion hard cap, is projected to hold a final close in March, Buyouts reported earlier this month. In a Jan. 8 SEC filing Patria disclosed it had raised $484.2 million toward an undisclosed target.

New York State Teachers’ remaining commitments were allocated across funds being raised by Clearlake Capital, Siris Capital and Thoma Bravo (see chart).

New York State Teachers’ Retirement System Q4 Commitments
Firm Fund Commitment (in millions)
Clearlake Capital Clearlake Capital Partners V $125
HarbourVest Partners Maple Fund $600
Thoma Bravo Thoma Bravo Discover Partners II $100
Siris Capital Siris Partners IV $150
IK Investment Partners IK Small Cap Fund II $62
Patria Investments Patria — Private Equity Fund VI $150
Sycamore Partners Sycamore Partners III $100
LS Power LS Power Equity Partners IV $100
Capvis Equity Partners Capvis Equity V $93
ADV Partners ADV Opportunities Fund II $100
Linden Capital Partners Linden Capital Partners IV* $100
The Carlyle Group Carlyle Asia Partners V* $100
Total $1,780
Source: NYSTRS    
*Commitments approved in January, 2018

The $115.5 billion retirement system also disclosed two commitments to Linden Capital Partners IV and Carlyle Asia Partners V. Those commitments, both of which were for up to $100 million, were approved by NYSTRS CIO and Executive Director Thomas K. Lee in January.

Linden Capital Partners is targeting $1.25 billion for its fourth fund, a $500 million jump from the $750 million it raised through Fund III in 2015, Buyouts reported in late 2017. Carlyle Group’s new Asia-focused buyout fund is targeting $5 billion and held a first close on $4.5 billion in November, according to an earnings call transcript.

NYSTRS valued its PE program at around $7.5 billion at year-end. The portfolio was netting a 12.2 percent internal rate of return as of Sept. 30, 2017.

Action Item: For more on NYSTRS’ new commitments, visit http://bit.ly/2nsFUQz

Traders work on the floor of the New York Stock Exchange on ’April 5, 2016. REUTERS/Brendan McDermid

UPDATE: The story was updated to include information sent by New York State Teachers’ Retirement System.