Pennsylvania commits up to $250 mln to Vista, Permira funds

  • Pension forms new relationship with Vista
  • Re-ups $100 mln to Permira’s new buyout fund
  • Pennsylvania holds 17.7 pct of its assets in alternatives

Pennsylvania State Employees’ Retirement System committed as much as $250 million across a pair of buyout funds at its Sept. 14 meeting, a statement said. Both commitments remain subject to final negotiations.

The larger of the two went to Vista Equity Partners VI, which is targeting $8 billion with a $10 billion hard cap for investments in enterprise-software businesses. The Pennsylvania system committed as much as $150 million to Fund VI.

Vista Equity Partners represents a new relationship for the $26 billion retirement system. The firm’s newest buyout fund has been extremely popular among limited partners over the past year, collecting commitments from New Jersey Division of Investment, New York State Common Retirement Fund and Oregon Investment Council.

Returns generated by the firm’s four previous flagship funds rank among the top 25 percent of private equity funds for their respective vintage years, according to data cited by Portfolio Advisors in a report for Los Angeles City Employees’ Retirement System. LACERS committed as much as $30 million to the fund.

Pennsylvania State Employees’ also committed up to $100 million to Permira VI, which is seeking 6.5 billion euros ($7.31 billion) with a 7.25 billion euro hard cap. The system is a longtime investor with Permira, having committed $325 million across four of the European buyout firm’s previous funds.

In its 2016-2017 strategic plan, the Pennsylvania pension indicated it would target commitments sized $100 million or more to improve its ability to negotiate lower management fees.

It’s unclear what fees or terms the retirement system expects to obtain on its pending commitments to Permira and Vista. Spokeswoman Pamela Hile could not be reached for comment.

Pennsylvania State Employees’ Retirement System held 17.7 percent of its assets in alternative investment funds as of March 31, more than 2 percentage points short of its 20 percent target. The system counts its commitments to PE, venture capital and special-situations funds toward its alternatives allocation.