Firms & Funds

NYS Teachers’ pledged $700 mln to PE in Q3

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NYS Teachers' Retirement System, private equity, pension fund
The Statue of Liberty after a press tour in New York, Aug. 2, 2004. Reuters/Chip East
  • Why this is important: NYS commits $700 mln to PE and VC, renews Aon Hewitt consulting accord
  • AUM: $115 bln
  • PE portfolio cash-flow positive for Q3
  • PE portfolio is two-thirds buyouts

New York State Teachers’ Retirement System committed $700 million to four private equity funds in the third quarter.

The retirement system, which manages $115 billion in assets, made its largest commitment of the quarter to Hellman & Friedman, committing up to $300 million to its Capital Partners IX fund.

The Hellman & Friedman fund, which closed on $16 billion in October, focuses on buyouts in North America and Europe.

The commitment was approved by the board on Aug. 1 and closed on Sept. 28, materials from the system’s Oct. 31 and Nov. 1 meetings show.

NYSTRS also committed $200 million to Thoma Bravo Fund XIII, which focuses on software and technology-enabled service companies, with a target of $11.5 billion; $100 million to South Korea-focused middle-market buyout firm Hahn & Co, spread between Funds III and III-S, which will co-invest alongside the main fund; and $100 million to TCV Fund X, which focuses on late-stage venture, growth and public companies in the internet, software, infrastructure and services subsectors of the technology industry.

The retirement system also extended its contract with Aon Hewitt, its general investment consultant, for one year. The new contract will begin on Feb. 1, 2019, according to a summary of meeting actions. TorreyCove Capital Partners is the retirement system’s PE consultant.

NYSTRS’s PE portfolio was cash-flow positive for the quarter, with $531 million in contributions to existing partnerships and $603 million in distributions, according to meeting materials. The retirement system has an 8 percent target allocation to PE.

The PE portfolio has $21.4 billion in active commitments, $8.3 billion in market value and $5.8 billion in unfunded commitments, as of Sept. 30.

By total exposure, NYSTRS’s private equity portfolio was 68 percent buyouts, 9 percent funds of funds, 8 percent co-investments, 6 percent VC, 5 percent secondary funds and 5 percent turnarounds.

Action Item: Read more about actions taken at the Nov. 1 meeting here: https://bit.ly/2F4u3o3