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Texas Pension Unveils Commitments, Short-Listed Funds

Aiming to boost its private equity holdings, the $18.2 billion Texas County & District Retirement System listed several newly finalized private equity commitments, plus several other funds that were on its “short list” for possible consideration.

The recently finalized private equity and venture capital commitments include $50 million to Oaktree Capital Management’s Oaktree European Principal Fund III LP, $42 million to Waterland Private Equity’s Waterland Private Equity Fund V LP, $42 million to Chequers Capital’s Chequers Capital XVI, $40 million to KSL Capital PartnersKSL Capital Partners III LP, $40 million to Davidson Kempner’s Davidson Kempner Long-Term Distressed Opportunities Fund LP, $35 million to Khosla Ventures’s Khosla Ventures IV LP, $20 million to H.I.G. Capital’s H.I.G. Growth Buyouts & Equity Fund II LP and $5 million to LC Capital’s LC Fund V LP.

The pension’s asset allocation targets are heavily weighted toward alternative investments, including 10 percent for private equity and 20 percent for hedge funds and absolute return strategies. Both targets were raised this year.

A fund spokeswoman said the pension’s private equity program was relatively new, which is one reason for the big difference between the fund’s 10 percent private equity target and the 3.9 percent of holdings that constitute invested private equity capital.

In addition to releasing information on approved commitments, the pension also named 17 private equity funds that were under consideration and subject to due diligence by the pension’s investment officer Paul Williams. They PE funds under consideration include ABRY PartnersABRY Partners VII and ABRY Advanced Securities Fund II, Advent International’s Advent GPE VII, Barclays Private Equity’s Barclays Private Equity European Fund IV, Berkshire PartnersBerkshire Partners Fund VIII, Coller Capital’s Coller International Partners VI LP, Denham Capital’s Denham Commodity Partners Fund VI, Enterprise InvestorsPolish Enterprise Fund VII, Exponent’s Exponent Private Equity Partners III LP, Genstar Capital’s Genstar Equity Partners VI, Graphite Capital’s Graphite Capital Fund VIII, H.I.G. Capital’s H.I.G. Capital Fund V, Nordic Capital’s Nordic Capital Fund VIII, Pine Brook Road Partners Pine Brook II Fund, Quad C Management’s Quad-C Partners VIII LP, The Energy & Minerals Group’s Energy & Minerals Group Fund II LP, and Warburg Pincus’s Warburg Pincus Private Equity Fund XI.

In addition to private equity, the pension is also considering four distressed debt funds, including OCM’s OCM European Principal Opportunity Fund III, Avenue Capital’s Avenue Europe Special Situations Fund, Sankaty AdvisorsSankaty Credit Opportunities V LP, and Victory Park Capital’s Victory Park Capital II Fund.

The pension administers benefits for 220,000 Texans employed at the county and district level.