NJ Commits $251M To Vista, CVC

  • $74.3 billion New Jersey pension taps mid-market, European funds
  • Vista Foundation Fund II gets $100 million commitment
  • CVC Capital Partners Fund VI receives $151 million pledge

The state division that manages the $74.3 billion New Jersey pension fund has already invested in predecessor funds of both Vista Equity Partners and CVC Capital Partners either directly or through funds of funds

In March, Christine Pastore took a job at Vista Equity Partners as a senior vice president and head of investor relations after serving as co-head of alternative investments and head of private equity for the New Jersey Division of Investment. She was instrumental in leading the fund’s expansion of its alternative investment program while working for Timothy Walsh, the chief investment officer of the Garden State’s pension system.

Known as a specialist in the enterprise software space, Vista drew a $100 million commitment from New Jersey for Vista Foundation Fund II, part of a initial fundraising target of $500 million for the buyout vehicle. The mid-market fund will acquire controlling interest in business software companies with an enterprise value of $20 million to $200 million “with significant value creation opportunities,” according to a letter from Walsh to the state investment council.

Walsh said the fund’s $100 million commitment to Vista Equity Partners III ranks as its top-performing private equity fund since inception. Other New Jersey commitments include $200 million for Vista Equity Partners IV and $10 million for Vista Foundation Fund I.

Walsh cited Vista’s “outstanding track record” by achieving a gross cash multiple of 4.1x and gross internal rate of return of 50 percent on realized investments since the creation of the firm in 2000. Vista’s net multiple for all investments, realized and unrealized, is 1.8x with a net IRR of 29 percent.

New Jersey also allocated 100 million pounds ($151 million) to CVC Capital Partners VI, a large European buyout fund with a target of 9 billion pounds. New Jersey has already invested in two predecessor funds of CVC Capital VI through two European funds of funds.

“CVC’s broad geographic and industry scope, deep team and consistent track record makes CVC VI an attractive opportunity to gain direct access to a non-U.S. private equity partnership rather than through a fund of fund or a separate account vehicle,” Walsh said.

CVC has generated a “consistent top quartile performance” with an internal rate of return of 19.6 percent and a net total value to paid in of 1.7x as of Dec. 31, 2012. Past CVC portfolio companies include Star Bev, Samsonite and Merlin Entertainment.

Among its other alternative investments, the state approved a $150 million follow-on commitment for GSO Credit-A Partners, a hedge fund vehicle managed by GSO Capital Partners, a unit of The Blackstone Group.

Additional reporting by Gregory Roth.