Oregon, meanwhile, likely doesn’t have much more money to commit this year, according to Senior Equity Investment Advisor Jay Fewel. “We’re essentially out of money for 2007,” given the amount buyout firms coming back to market this year which it expected to come back next year. The money hasn’t been officially committed yet, and Oregon is still open to meeting with general partners, Fewel added. The $62.1 billion pension will likely commit about $2.5 billion to about 20 funds this year, including funds managed by
The state put out a request for proposal for a private equity advisor last fall, after a number of executive departures from La Jolla, Calif.-based PCG. Losing the business of Oregon would have been a big blow to the newly established PCG Asset Management. PCG founder Chris Bower established the division as a legally separate entity earlier this year in order to give employees ownership of the division and stop the bloodletting of personnel. Bower now oversees PCG’s direct investment business.
Oregon is highly regarded as one of the oldest and more sophisticated investors in the industry. It aims to invest 9 percent to 15 percent of its assets in private equity. At the end of the first quarter, it was at roughly 11 percent. The vast majority of Oregon’s capital goes to buyout funds, as venture funds are too small to hold the size checks the pension needs to write, said Fewel.
Oregon has long-standing relationship with some of the biggest names in the business, including The
About 10 advisor shops vied to win the RFP, including Hamilton Lane. PCG won in part because of its low fees, and the high returns PCG has helped to generate for Oregon and other clients, said Fann. In maintaining the contract from Oregon, PCG was able to overcome the departure last year of Tara Blackburn, who had been the chief liaison between PCG and Oregon, and who now is at Hamilton Lane.
Commenting on the rehire of PCG, Fewel said, “We’ve had a long standing relationship with PCG and we viewed their structural changes as a positive.” Hamilton Lane’s offer was essentially equal to that of PCG’s said Fewel, but, “the tie went to the incumbent.”
Blackburn is just one of a number of executives that have left 28-year old PCG since 2005, turnover that has led at least two of its clients to explore replacing it.
Overall, clients of PCG Asset Management have some $15 billion in alternative investments. Other PCG clients include
Bower still owns 50 percent of PCG Asset Management, but employees will have the opportunity to acquire the other 50 percent in the coming years. Their stakes start at 25 percent. Notably, a trio of ex-PCG advisors have started their own firm which is 80 percent employee owned, called Leucadia Capital Partners.—M.C.