LPs

San Diego City co-investment portfolio nets 25.8 pct

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San Diego City Employees' Retirement System, private equity, pension fund, GCM Grosvenor, StepStone Group
A passenger plane approaches to land as other aircraft taxi to the runway at the San Diego International Airport in San Diego, California, April 22, 2013. Photo courtesy REUTERS/Mike Blake
  • PE account with GCM values co-investments $194.8 mln
  • Co-investment portfolio marked at 1.61x
  • GCM, StepStone accounts also invest in PE funds, infra

San Diego City Employees’ Retirement System’s separate account with GCM Grosvenor deployed a little less than a third of its committed capital for private equity into co-investments, netting the retirement system a 25.8 percent internal rate of return, a report prepared for the system shows.

The $194.8 million co-investment portfolio’s projected to return a 1.61 multiple on invested capital net of fees as of Sept. 30, the May 10 report says. San Diego’s stakes in 28 of the 31 companies are held at or above the cost of their investment.

The system made two new co-investments totaling $6.3 million through its separate account with GCM Grosvenor in Q3. San Diego formed the GCM Grosvenor account in 2009, when the team was still part of Credit Suisse.

San Diego’s separate account with StepStone Group, also formed in 2009, has deployed roughly $142 million into co-investments since its inception, netting the retirement system a 12.8 percent IRR as of Sept. 30.

“We currently have about 33 percent dedicated to co-investments and expect that percentage to remain fairly consistent,” San Diego Communications Manager Jessica Packard wrote in an email. “However, we are always looking for good investment opportunities and have a flexible mandate so the allocation could move up or down depending on the opportunities available.”

San Diego’s accounts with GCM Grosvenor and StepStone, both of which are valued at more than $500 million, also commit to PE and infrastructure funds on behalf of the $8 billion retirement system.

San Diego’s GCM Grosvenor account was netting a 16.2 percent IRR as of Sept. 30. Its account with StepStone were netting 14.4 percent as of that date.

GCM Grosvenor and StepStone did not respond to requests for comment.

Action Item: San Diego City Employees’ Retirement System: www.sdcers.org

A passenger plane approaches to land as other aircraft taxi to the runway at the San Diego International Airport in San Diego on April 22, 2013. Photo courtesy REUTERS/Mike Blake