Oregon says it may not get full commitment to ‘popular’ Francisco fund

  • Oregon commits $550 mln to PE in December
  • Allots $225 mln to Francisco Partners Fund IV
  • Final tally may be smaller because fund is “popular”

The Oregon Investment Council approved as much as $225 million for Francisco Partners IV, but the final commitment may close for less than that, spokesman Michael Cox said.

“We asked for an amount that we would be comfortable investing, with the expectation that it could end up being less,” Cox said. “It’s a popular fund.”

Many limited partners see the size of their commitments reduced when funds become oversubscribed. Francisco Partners, a San Francisco and London-based technology firm, set a $2 billion target for Fund IV, according to a pair of Form Ds filed with the SEC in November.

Oregon invested in two of the firm’s earlier funds. Francisco Partners II, a 2006 vintage, had generated a 13.1 percent IRR and 1.68 multiple as of June 30, according to state documents. Fund III generated a 1.32x multiple as of the same date.

Francisco Partners declined to comment.

In addition to its commitment to Francisco Partners, Oregon disclosed up to $550 million of commitments to private equity funds in its Dec. 3 investment council meeting materials.

Oregon’s largest commitment, at $250 million, went to oil and gas investment firm Sheridan Production Partners, which is targeting $1.75 billion for its third flagship fund. Oregon committed to Sheridan through its alternatives portfolio, a $1.3 billion asset allocation to natural resource and infrastructure funds, as well as hedge funds and other investments.

In addition, Oregon committed $200 million to Black Diamond Capital Mangement’s fourth fund. Details about Black Diamond Capital Management IV’s size or strategy were not available. An investor relations partner at Black Diamond had not responded to a request for comment as of press time.

Oregon’s State Treasury, which controls roughly $70 billion of state retirement assets, also committed up to $100 million to Advent Latin American Private Equity Fund VI, which closed on its $2.1 billion hard-cap in November. Advent International received commitments from more than 60 institutional investors for Fund VI, which will invest in later stage companies throughout Latin America.

Oregon had a 21.8 percent allocation to private equity as of September 30, according to meeting materials. The State Treasury values the portfolio at approximately $15.1 billion.