The San Francisco Employees’ Retirement System has drastically slowed its commitment pacing to alternatives but still pledged a total of $40 million to an existing relationship.
The limited partner set an investment pace of about $275 million for its calendar-year 2009 alternative investment program, according to Norm Nickens, spokesperson. This is a little more than half its investment pace of roughly $525 million for calendar-year 2008. The city’s pledges typically range from $10 million to $40 million.
In mid-March, the pension fund committed up to $25 million to TA Associates XI LP and up to $15 million to TA Subordinated Debt Fund III LP. TA Associates will focus its eleventh fund on buyouts in the technology, financial services, business services, healthcare and consumer sectors in North America and Europe. The predecessor was a $3.5 billion fund that made investments of $50 million to $300 million. TA Subordinated Debt Fund III will provide subordinated loans to mid-market growth companies, mainly in opportunities developed and led by TA Associates. The previous debt fund, which closed in March 2006, collected $777.5 million. TA Associates X, a $2 billion fund organized in July 2000, had an IRR of 21.6 percent, as of March 2008, according to the California State Teachers Retirement System, and TA Subordinated Debt Fund II had an IRR of 9.34 percent.
The $12 billion pension fund, with a portfolio heavy on buyout funds, has a target allocation of 14 percent to alternatives. The range for the alternative investment asset class is 10 percent to 18 percent. As of Feb. 28, 2009, the LP had an actual alternative allocation of 14.9 percent, or $1.64 billion.