Texas County & District backs Vista for $65 mln

  • TCDRS backs PE, VC for $112.5 mln in March
  • $24.3 bln pension commits to Lightspeed, Spark Capital
  • Texas County & District has 12 pct target for PE

The Texas County & District Retirement System committed $112.5 million to private equity and venture capital in March, according to its website.

The $24.3 billion retirement system’s largest commitment went to Vista Equity Partners’ new flagship fund. TCDRS committed $65 million to Vista Equity Partners VI, which is targeting $8 billion with a $10 billion hard cap for investments in enterprise-software companies.

Vista Equity Partners, which is led by Robert Smith, recently held a first close on more than $5.78 billion, Dow Jones reported. The firm closed Fund V on $5.78 billion in 2014.

Vista will likely encounter strong demand for its latest flagship fund, sources told Buyouts. While its 2014 fund has yet to generate meaningful returns, its $3.5 billion 2011 vintage fund netted a 21.4 percent internal rate of return and 1.68x multiple through Sept. 30, according to Oregon Public Employees Retirement Fund documents. Vista III netted a 31.7 percent IRR and 2.68x multiple as of the same date.

According to Oregon’s published returns, both funds would rank within the upper quartile of Cambridge Associates’ third-quarter U.S. Private Equity Index.

TCDRS also allocated $47.5 million across three venture-capital funds. The retirement system counts venture-capital commitment as a component of its overall exposure to private equity.

Texas County & District Retirement System committed $20 million to Lightspeed Venture Partners XI and $15 million to Lightspeed Venture Partners Select II, according to its website. On March 9, Lightspeed Venture Partners announced it had closed Fund XI on $715 million and Venture Partners Select II on $500 million.

The retirement system also committed $12.5 million to Spark Capital V, a VC fund managed by Spark Capital. Spark, which counts Twitter and Tumblr among its portfolio companies, set a $370 million target for Fund V, according to an SEC filing.

TCDRS set a 12 percent target allocation for private equity, according to its website. The retirement system has committed $267.5 million to private equity and venture capital year to date.

The retirement system’s $2.5 billion private equity portfolio generated a 13 percent five-year annualized return as of Sept. 30.

Action Item: For a list of Texas County & District Retirement System’s commitments, visit its website at www.tcdrs.org

Photo courtesy of Reuters