Texas ERS commits $20 mln to TA Associates fund

The system is willing to invest at least $1 billion in private equity commitments over the next two years.

Employees Retirement System of Texas committed to a TA Associates fund in November, according to Operational Due Diligence Analyst Rodrigo Dominguez.

The system invested $20 million in TA Select Opportunities Fund, targeting $1 billion. The fund takes minority positions in companies that TA Associates invests in and sell to third-party sponsors, Buyouts previously reported. Sources told Buyouts in October that the fund won’t charge LPs a management fee but will get fees from portfolio companies.

Founded in 1968, TA Associates has invested $23 billion into companies in the business services, consumer, financial services, healthcare and technology industries, according to its website.

New Mexico State Investment Council also committed to TA Select Opportunities Fund. New Mexico SIC pledged up to $75 million to the pool in October.

Texas ERS has an existing relationship with TA Associates. In May, the system invested $100 million to TA XIII, which focuses on small-to-medium buyouts and slow-growth companies. TA Associates’ thirteenth fund closed earlier this year with $8.5 billion. Texas ERS also committed to TA XI and XII and TA Subordinated Debt funds III and IV, Dominguez told Buyouts.

Texas ERS aims to commit $800 million to private equity, with the option to invest up to $1 billion, to nine to 18 funds, in fiscal year 2020; $1 billion in 2021; and $1.2 billion in 2022. The system increased its 2019 target allocation for PE from $1 billion to $1.45 billion, according to Buyouts.

Some past Texas ERS PE commitments for 2019 include: 50 million euros ($55.2 million) to Investindustrial’s seventh fund; $25 million to Baring Private Equity Asia’s ERS Private Equity Manager Fund III; $110 million to Advent International Global Private Equity Fund IX; $125 million to LGT Capital Partners’ Crown Asia Private Equity Fund IV; $25 million to TPG Healthcare Partners; and $25 million to TPG Partners VIII.

Private equity makes up 14.4 percent or $4.12 billion of Texas ERS’ total portfolio, as of Sept. 30, according to the system’s market summaries report.