Sacramento County Has Money To Spend On PE

The Sacramento County Employees’ Retirement System may pledge up to $50 million to private equity over the next 12 months, Chief Investment Officer Jeffrey States told Buyouts.

The $5 billion pension fund, which made its first commitments to the asset class in 2008, has to date only pledged to funds of funds. Upcoming pledges will most likely go to venture capital, mezzanine and buyout funds, said States, although he did not know how the amount might be allocated among the strategies.

In late 2007, the county decided to place $75 million each with fund-of-funds manager Abbott Capital Management and Goldman Sachs Asset Management, and $50 million with fund-of-funds manager HarbourVest Partners.

The LP has a target allocation to private equity of 5 percent, with a range of 4.5 percent to 5.5 percent. As of June 30, the actual private equity allocation stood at 0.5 percent.

The retirement system can commit to limited partnerships, funds, and funds of funds that invest in domestic and international private venture capital, mezzanine capital, buyouts, and distressed debt, as well as direct private equity, debt securities and other unique strategies, which the LP commits to via an opportunistic allocation.

In related news, States is leaving the California pension fund to join the Nebraska Investment Council as its new state investment officer and will start his position there on Nov. 9. He has served as the CIO of Sacramento County since 1997.