Rhode Island State Investment Commission made its final private equity commitment for the year via a new engagement with a manager focused on sustainable food.
The combination of a fast-paced fundraising environment and the denominator effect has forced several large public pension plans to adjust their private equity strategies, which in some case includes halting commitments for the rest of the year.
Rhode Island’s $10.5 billion fund is the latest to do so, following the footsteps of Iowa Public Employees’ Retirement System that last week made a similar decision.
Rhode Island committed $30 million to Paine Schwartz Food Chain Fund VI, along with $15 million to a related co-investment vehicle. Rhode Island previously committed $50 million to Paine Schwartz’s fifth fund.
According to Rhode Island investment analyst Saul Ioffe, this is the 10th private equity commitment the fund made for the year, at a total of $290 million. Rhode Island’s original pacing plan was to make between $200 million and $250 million from five to 10 funds this year, according to Ioffe.
The pension’s actual allocation to PE was at 15 percent as of the meeting held on June 22, above its 12.5 percent target, Ioffe said.
“This is our last commitment of the year,” he said.
According to Ioffe, Fund VI plans on making 10 to 12 buyout deals in the sustainable agriculture and food space.
The target for Fund VI is not known. Paine Schwartz did not provide comment on this story.
“This is an area that is relatively underinvested in the private equity space and Paine Schwartz can source deals more on a proprietary basis,” Ioffe said.
Paine Schwartz raised $1.4 billion for its fifth fund, which closed in 2019.
Paine Schwartz was founded by Dexter Paine in 2006, according to the company’s website.
The firm came out of Fox Paine & Co, which ended after Paine and former partner Saul Fox split in 2006, Buyouts previously reported.
Paine serves as chairman of the firm. CEO Kevin Schwartz previously worked for Fremont Partners and American Industrial Partners before moving to Fox Paine in 2001, according to the firm’s website.
Some of Paine Schwartz’s active portfolio companies include Urban Farmer, which specializes in manufacturing plant-based dough-products, and California fruit grower Prima Wawona. Paine Schwartz exits include seed producer Verisem BV and food safety technology platform FoodChain ID.