UTIMCO Makes Big Push in Asia PE

Endowment: University of Texas Investment Management Company

PE Target Allocation: 25 percent

Overall Assets: $27 billion

Chief Investment Officer: Bruce Zimmerman

As part of its ongoing strategy to invest in emerging markets, the $27 billion University of Texas Investment Management Company made five of its last seven private equity commitments in emerging markets funds, four of them in Asia.

“These things tend to come in bunches,” said Lindel Eakman, UTIMCO’s Managing Director of Private Markets. UTIMCO has a 25 percent target allocation to private equity. UTIMCO is the pooled endowment fund for universities in the University of Texas system.

The endowment fund’s commitment to emerging market buyout funds “is part of a six-year trend,” said Eakman. “We have a mature PE portfolio, but it’s less mature in emerging markets,” he said. Eakman said there would likely be more commitments to emerging market PE funds in the next few months.

One of the funds UTIMCO committed to is Black River Capital’s Black River Capital Partners Fund (Food), LP, a fund with a $455 million target that UTIMCO plans to commit $40 million to. Black River is a subsidiary of Cargill, the giant agribusiness firm. Black River Capital intends to focus on Asia’s food industry.

A second Asia-focused investment pool is Emerald Hill Capital Partners II – Co-Invest A, LP, to which UTIMCO is committing $100 million. UTIMCO will be the sole investor in this co-investment vehicle, which will be managed by Emerald Hill Capital Partners, a firm that UTIMCO has already invested $110 million with in that firm’s first two funds.

India is also a destination for UTIMCO money, as it plans to invest with Everstone Capital’s Everstone Capital Partners II LLC. UTIMCO will invest up to $42 million in the fund, which has a target of $580 million.

The final Asian fund in the latest round of commitments is Northstar Equity’s Northstar Equity Partners III, Ltd., a growth private equity fund that plans to invest largely in Asian retail and financial service firms. The fund has a target of $820 million and UTIMCO plans to invest as much as $100 million.

Outside of Asia, but a big emerging market nonetheless, Brazil took in $100 million in UTIMCO funds. The investment is to Patria’s $1.2 billion Patria Brasil Private Infrastructure Fund II, LP.