San Francisco pension forms relationship with Genstar, commits to impact investing

San Francisco Employees’ Retirement System pledged $225 million to funds from ABRY Partners, Genstar Capital and TPG, according to a memo from CIO William Coaker prepared for its March 13 meeting.

The pension invested $75 million in Genstar Capital Partners IX and Genstar IX Priority Co-invest program in January. The pool’s ninth fund received $56.2 million, while its co-investment fund received $18.75 million. Genstar closed Partners IX with $5.5 billion in LP commitments on Feb. 25.

The commitment was the first time the group has invested in Genstar, which focuses on financial services, healthcare, software and industrial tech in the middle market.

SFERS approved $50 million to ABRY Partners IX, targeting $2.1 billion, in January. Its flagship fund is geared toward media, communications, information and business services. SFERS has committed to ABRY’s buyout strategy eight previous times, Coaker said.

The system also committed $100 million to TPG’s impact investing platform Rise Fund II in January, that has a hard cap of $3.5 billion and focuses on small-and-middle-market buyout and growth companies, Buyouts reported. San Francisco in 2017 committed $50 million to the debut Rise Fund.

The SF pension’s current allocation to private equity is 19.8 percent, or $4.9 billion, exceeding its 18 percent target, as of Feb. 28.

Private equity posted solid returns of 11.26 percent for the first eight months of FY 2018-19 in large part because of “a strong IPO market for technology and biotech stocks as well as corporate revenue growth among private companies,” per the memo.