Texas County pension ramps up aggressive PE activity

The $44bn system allocates more than 27% of its portfolio to private equity.

Texas County & District Retirement System continues to develop its robust private equity program, pledging more than $500 million to 13 private equity managers this year.

With a current private equity allocation of 27 percent, the $44 billion system has one of the largest exposures of any public system in the country, according to the system’s monthly report for September.

Texas County is continuing to build out its private equity holdings with 14 pending commitments undergoing due diligence, according to a presentation from adviser Cliffwater included in the September report.

Valuations increased by $2.6 billion for the year ending March 31, although results were mixed in the first quarter, according to the report.

The private equity program has returned 17.3 percent for the year ending March 31, according to the presentation.

A strong exit market led to more than $7.8 billion in distributions for the year, according to Cliffwater.

The system has steadily increased its target to private equity over the past several years.

It eclipsed over $1 billion in commitments since the 2018 vintage year, according to Cliffwater. Texas County committed more than $2 billion for the 2020 and 2021 vintage years.

The private equity portfolio contained 5,019 companies, with 37 percent of those classified as IT firms, according to the report. North American firms make up 72 percent of these companies, with another 14 percent located in Western Europe and 9 percent in Asia, according to Cliffwater.

Texas County allocates 45 percent to buyouts, 24 percent to venture capital, 21 percent to non-US investments, nine percent to energy and 1 percent to co-investments, according to Cliffwater.

The closed commitments include:

• $14 million to Threshold Ventures IV

• $100 million to DCVC VI

• $85 million to Water Street Healthcare Partners V

• $5 million to CRV Select Fund II

• $20 million to CRV XIX

• $30 million to OpenView Venture Partners VII

• $70 million to Orbimed Private Investments IX

• $50 million to IDG China Venture Capital Fund VII

• $25 million to The Column Group Opportunity III

• $25 million to The Column Group V

• $55 million to Joy Capital IV

• $22 million to Shine Capital II

• $10 million to Shine Capital Opportunities Fund I

Potential commitments undergoing due diligence include:

Clairvest VII

Cortec VIII

Gemspring III

Genstar XI and Opps II

Greenbriar VI

Hellman & Friedman XI

Linden Co-Invest I

Parthenon VII

Sverica VI

TA XV & Select Opps III

Vistria V

ZMC IV

• Glide Healthcare Venture & Growth VI

• Summit Europe IV