NJ Pledges $75M To Swiss Funds-Of-Funds Manager

The New Jersey State Investment Council recently confirmed its high regard for opportunities in the secondary market with a fresh $75 million commitment to Swiss funds-of-funds manager Partners Group.

The pledge to Partners Group Secondary Fund 2008 follows a $50 million commitment to the firm’s previous secondary fund, Partners Group Secondary 2006. Earlier this year, the limited partner committed $100 million to Lehman Brothers Secondary Opportunities Fund II LP.

“The market for secondary transactions we believe is becoming more attractive, and Partners Group has the team and proven track record to take advantage of the coming opportunity,” said William G. Clark, director of the LP’s investment division, in a September memo. The New Jersey State Investment Council has roughly $76 billion in assets under management.

Partners Group, a Baar-Zug, Switzerland-based firm, seeks to acquire European secondary investments in funds from two to four years old that have 40 percent to 70 percent of their capital drawn. The firm is looking to gather €2 billion ($2.5 billion) for Fund II. The Pennsylvania Public School Employees’ Retirement System committed up to €150 million to the fund earlier this year.

Partners Group closed its 2006 secondary fund with €1 billion in commitments. Backers included the San Bernardino County Employees’ Retirement System, as well as banks, corporate pension plans, public pension plans, endowment funds, insurance companies and trusts.

In related news, the New Jersey State Investment Council has also forged a new relationship with a U.S. industry-specific buyout fund, committing $100 million to Welsh, Carson, Anderson & Stowe XI LP, according to Thomas Vincz, spokesperson. Welsh, Carson, Anderson & Stowe plans to use Fund XI for investments in growth-oriented middle-market companies in the information, business services and health care industries. The New York-based firm, which describes its investment strategy as “deal size agnostic,” seeks to raise $4 billion for Fund XI, with a hard cap of $5 billion. Welsh, Carson, Anderson & Stowe X LP (vintage 2005), a $3.4 billion fund, generated an IRR of 9.82 percent as of March 31, 2008, according to the California State Teachers’ Retirement System.