The $16 billion San Francisco Employees’ Retirement System approved a commitment of $30 million in mid-August to TowerBrook Investors III LP, marking its first commitment to the buyer of mid-sized and large companies in Europe and North America.
It’s unclear how the predecessor fund performed, but the one before that hit a home run. Towerbrook Investors I LP, as of year-end, generated a net IRR of 41.5 percent, and an investment multiple of 2.8 for backer California Public Employees’ Retirement System.
London and New York-based TowerBrook Capital Partners, with more than $3.5 billion under management, invests mainly in leveraged buyouts, leveraged build-ups and distressed situations. TowerBrook Investors II LP closed in March 2006 with $1.3 billion.
As of mid-April, TowerBrook had collected more than $760 million toward its $2.75 billion target from 33 backers; investors had to clear a minimum commitment of $10 million. The Massachusetts Pension Reserves Investment Management Board pledged $50 million to the fund in April. An obviously pleased CALPERS committed $300 million in June, and the Indiana Public Employees’ Retirement Fund promised $35 million to TowerBrook Investors III in July. UBS Securities is serving as the placement agent.
In late July, TowerBrook established Towerbrook Investors III Executive Fund LP to raise $50 million from executives for its third fund. Twenty-nine executives have already contributed $18.3 million. Although the fund has no minimum investment, individual pledges ranged from $200,000 to $1 million.
San Francisco Employees’ Retirement System, whose portfolio is weighted heavily toward buyout funds, set an investment pace of about $525 million for its calendar 2007 alternative investment program, according to its annual report of June 30, 2007. At that time, the market value for its alternative investments was $1.6 billion, or 9.5 percent of the total fund assets. The target range for the alternative investment asset class is 12 percent to 14 percent.