Santa Barbara plans $50 mln for PE in 2016

  • European funds a top priority in 2016
  • Also exploring opportunities in distressed debt, venture
  • PE portfolio valued at $170 mln as of Sept. 30

The Santa Barbara County Employees’ Retirement System expects to commit around $50 million to private equity in 2016, according to a report obtained through a records request.

Santa Barbara’s pacing plan allows for between $50 million and $70 million in commitments to private equity in 2016, but the $2.4 billion retirement system is “likely to stay at the lower end of the target range,” according to a presentation from Hamilton Lane, the pension’s private equity consultant. As of Sept. 30, Santa Barbara was slightly above its 7 percent exposure target for the asset class.

The pension expects to deploy capital to funds in Europe, where the depreciation of the euro is “impacting buying power,” Hamilton Lane wrote. Santa Barbara may develop additional exposure to distressed debt, venture capital and growth strategies as well.

Santa Barbara allocated $50 million across five private equity funds last year, according to the report. Although the pension devoted most of its 2015 commitments to buyout funds, it spread its allocation across a broad array of managers.

In May, Santa Barbara re-upped $10 million to Blackstone Group’s $18 billion flagship fund. Seven months later, it committed the same amount to a mid-market buyout fund targeting $300 million managed by Saw Mill Capital.

The pension also committed to funds managed by Gridiron Capital, Hamilton Lane and Kelso & Company, according to the report. A commitment to Advent International’s eighth flagship fund is currently pending legal review.

Santa Barbara valued its private equity portfolio’s market value at $170.9 million as of Sept. 30, according to the Hamilton Lane report. The portfolio delivered an 11.7 percent net internal rate of return and 1.3x multiple since inception.

Action Item: For more information about Santa Barbara’s portfolio, visit