NYS Teachers committed $646 mln to PE in Q4

  • Why is this important: Pledges big to TSG, ABRY, TCV, Hahn; is boosting co-invests, cutting fund of funds
  • AUM: $119 bln; PE target: 8 pct
  • Contact: communit@nystrs.org or +1 800-348-7298

New York State Teachers’ Retirement System committed $646 million to six private equity funds in Q4.

The $119.9 billion system has an 8 percent target allocation to PE, and the recent commitments included a mix of different geographic and strategic focuses.

From Oct. 1 through year-end NYS Teachers’ committed:

  • $200 million to TSG8, which closed on $4 billion in February 2019 and will focus on high-growth consumer companies with annual revenue of $50 million to $750 million;
  • $100 million total to Hahn & Co III and III-S, which will target mid- to large-cap companies operating in industrials, consumer, transport and retail;
  • $100 million to TCV X, which closed on $3 billion and will focus on late-stage venture, growth and public companies in the internet, software, infrastructure and services tech subsectors;
  • $65 million to Chrys Capital VIII, which will focus on growth or buyout investments in companies with ties to the Indian subcontinent;
  • $100 million to ABRY Partners IX, which has a $2.1 billion target and will focus on media, communications, information and business services companies with enterprise values ranging $250 million to $750 million; and
  • €71 million ($81 million) to Astorg VII, a €4 billion buyout fund targeting investments in healthcare, industrials, business services, technology, media and telecom companies headquartered in Western Europe.

The commitments to Hahn and TCV were first reported in Q3 but did not close until the fourth quarter.

NYSTRS in recent years has made a concerted push toward small and medium buyouts, which make up the largest part of its PE portfolio.

The fund’s PE portfolio is 43 percent small/medium buyouts, 25 percent large/megabuyouts, 9 percent funds of funds, 8 percent co-investments, 6 percent growth equity and venture capital, 5 percent turnaround strategies and 4 percent secondary funds.

The retirement system raised its PE allocation target to 8 percent in 2016 and it had a $2.18 billion pacing target for 2018.

NYSTRS wants to bring down its funds-of-funds exposure to 3 percent and increase its exposure to co-investments to 13 percent, according to its 2019 strategic plan.

Action Item: Materials from the system’s latest meeting: https://bit.ly/2BiWnim