San Francisco PE program nets 15.8 pct, surpassing benchmark

  • San Francisco inks four new fund commitments
  • $23 bln pension set 18 pct allocation target for PE, VC
  • San Francisco launched PE program in 1987

San Francisco Employees’ Retirement System’s private equity program has netted a 15.8 percent internal rate of return since inception, surpassing its benchmark by more than half a percentage point, according to a TorreyCove Capital Partners report distributed at its Aug. 9 board meeting.

San Francisco, which launched its PE program in 1987, measures its portfolio of PE and venture capital holdings against the S&P 500 with a five-percentage-point premium. The $3 billion PE portfolio includes $1.1 billion of VC holdings, along with stakes in growth capital, special situations and other strategies outside traditional buyout vehicles.

VC has been the top-performing strategy within San Francisco’s portfolio, netting a 22 percent return since inception, according to the TorreyCove report, which tracked returns through the end of last year. Buyout funds netted 15.3 percent since inception.

San Francisco has a 14.5 percent allocation to private equity and venture capital. The retirement system has increasingly committed larger amounts in each of the past three years to reach its 18 percent target allocation to the asset class.

Last year, San Francisco approved $1.6 billion of commitments across 25 new funds and co-investments. The retirement system closed on 24 of those investments for $1.19 billion.

The retirement system also disclosed four new fund commitments at its Aug. 9 meeting. San Francisco committed $50 million each to Asia Alternatives Capital Partners V, Insight Venture Partners X and Castlelake V. A $30 million commitment to Canaan XI, a venture capital fund, closed as well.

SFERS has $23 billion of assets. The system is led by Executive Director Jay Huishand Chief Investment Officer William Coaker.

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