After searching the nation for a person to oversee its alternative and real estate asset classes, the San Francisco Employees’ Retirement System ended up choosing someone right in its own back yard. A big priority for Donald Holcher: committing a total of $225 million to $325 million to private equity in 2010.
Holcher, a 27-year real estate industry veteran, has managed the pension fund’s real estate portfolio for the past 10 years. His responsibilities will now include assessing asset allocation; initiating new approaches in the two asset classes; recommending portfolio managers; and overseeing all externally-managed separate and commingled accounts.
The city plans on committing a total of $275 million to private equity in 2010, although it has a range of $225 million to $325 million, said spokesperson Norm Nickens. The focus will be select small and mid-market buyout funds, venture capital funds, special situations (distressed and secondary funds) and Asian investments. “We are expecting attractive opportunities in these areas and better access for public pensions,” Nickens told Buyouts.
Last year, the pension fund set the same investment pace of about $275 million for its private equity program. This is a little more than half its pace of roughly $525 million for 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.
The $12 billion retirement system has a target allocation of 14 percent to alternatives, with a range of 10 percent to 18 percent. As of June 30, 2009, it had an actual allocation of 12.8 percent.