NY Teachers Promote Shah, Makes Pledges

Amid a flurry of new commitments and passed-up proposals, the New York State Teachers’ Retirement System recently promoted Dhvani Shah to managing director of private equity, an executive staff position. Shah had joined the pension fund about a year ago as manager of private equity, having previously served as a vice president at Bank of America in Chicago.

Shah oversees a private equity portfolio that has room to grow as it aims for a target of 7 percent (with a cap of 12 percent) of the pension fund’s $72 billion of assets. New York Teachers’ has about 60 general partner relationships and more than 100 different funds in its private equity program. The limited partner, which has an appetite for buyout, venture capital, international and special situation funds, had an actual allocation to private equity of 6.7 percent, as of Dec. 31, 2009.

To help reach its target, in January the pension fund announced two new private equity commitments. The LP made a pledge of up to $65 million to Houston-based Sterling Group LP‘s latest fund, Sterling Group Partners III LP, which is earmarked for investments in manufacturing, converting, assembly, industrial services and distribution businesses in a wide variety of industries.

Wynnchurch Capital, meantime, got a commitment from New York Teachers’ of up to $25 million for Wynnchurch Capital Partners III LP. The firm engages in a variety of transactions, including buyouts, corporate carve-outs, recapitalizations, joint ventures, PIPE deals, bankruptcies and restructurings. Sectors of interest include niche manufacturing, value-added distribution, transportation and logistics, energy and power services, and business and industrial services.

Also in January, the pension fund renewed its agreement with StepStone Group to serve as private equity consultant, for one year, effective Feb. 1, 2010.

As for its plans in 2010, a spokesperson noted that the staff reviews dozens of private equity proposals each quarter, but most do not pass the initial screening. Those that do are evaluated in greater detail with the assistance of StepStone. Only proposals that meet the LP’s needs and are run by managers with strong track records are brought to the board for consideration, he said.