Firms & Funds

Pennsylvania re-ups $75 mln to Centerbridge, ABRY

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  • $50 mln to Centerbridge, $25 mln to ABRY
  • System scaling down allocation to alternatives
  • 21 pct current allocation, 15 pct target allocation

The Pennsylvania State Employees’ Retirement System re-upped with two alternative investment managers at its July 23 meeting, according to a statement released through its website.

The $27 billion retirement system committed up to $50 million to Centerbridge Capital Partners III, which will invest in distressed debt, mid-market private equity, special situations and structured financing, according to the announcement. Earlier this week, Bloomberg reported that Centerbridge Partners is targeting as much as $5.75 billion for the fund, though that could not be confirmed immediately with the firm.

Pennsylvania State Employees’ also committed up to $25 million to the eighth flagship fund from ABRY Partners, which is targeting $1.9 billion. The firm collected up to $200 million in commitments from the Los Angeles County Employees Retirement Association and the San Francisco Employees’ Retirement System for Fund VIII earlier this month.

Pennsylvania State Employees’ latest re-ups are consistent with its ongoing initiative to commit larger amounts to a smaller number of top-tier managers, according to the announcement.

With its newest commitment to ABRY, Pennsylvania State Employees’ is now a limited partner in nine of the firm’s active funds, according to a private market holdings disclosure dated Dec. 31. The retirement system is also an LP in Centerbridge Capital Partners I.

Pennsylvania State Employees’ approved a new investment plan in April that reduces its target allocation for alternative investments, which includes private equity, venture capital and special situations, to 15 percent from 16 percent. The new target is well below the retirement system’s current allocation, which stood at 21 percent as of March 31.

The plan earmarks $600 million in annual commitments to illiquid investment strategies in 2014 and 2015, of which roughly $500 million has been allocated to alternatives, spokeswoman Pamela Hile told Buyouts.

Pennsylvania State Employees’ committed $50 million to alternatives in June, allocating up to $25 million each to Meritech Capital Partners V and JMI Equity Fund VIII.