- $75 bln state pension overallocated to PE, at 21.3 pct
- PE target is 17.5 pct
- Pacing plan: pledge of $2.5 bln to $3.5 bln in 2019
Oregon Treasury committed $675 million to private equity funds in the past month, backing managers focused on Europe, financial services, energy and large global buyouts.
The treasury, which manages the $75 billion Oregon Public Employees’ Retirement Fund and $28.9 billion in other state funds, is over its target allocation to PE. The pension fund has a 21.3 percent allocation to private equity, with a 17.5 percent target.
All new commitments were made on behalf of the pension fund.
The state pledged:
- $150 million to Advent International Global Private Equity Fund IX, which has a $16 billion target and will invest primarily in Europe and North America;
- $250 million to Aquiline Financial Services Fund IV, which focuses on financial services in insurance, fintech and services, investment management and banking and credit. Aquiline’s third fund closed on $1.1 billion in 2016;
- €200 million ($223 million) to Cinven Fund VII, reportedly targeting €10 billion and focused on buyouts in consumer, healthcare, financial services, industrial, business services and TMT. The sixth Cinven Fund closed on €7 billion in 2016;
- $50 million to LS Power’s Bolt Energy fund. LS Power Equity Partners IV closed on $2.25 billion in 2018.
All commitments were approved under authority delegated to the three-member PE committee, and were reported at the Oregon Investment Council’s April meeting. The council’s investment policy enables the PE panel to commit up to $350 million to funds managed by Oregon’s current GPs and up to $250 million to funds managed by new partners.
Oregon committed $3 billion to 12 PE funds in 2018, while building out its PE team and embarking on a fee-negotiation effort with PE managers. OIC has approved a PE-pacing target of $2.5 billion to $3.5 billion for 2019.
Action Item: Oregon’s investment council meeting materials: https://bit.ly/2Bfffyp