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Ventura County takes flight with $135 mln of commitments

  • Commitments include first to a direct fund
  • Adams Street, HarbourVest receive re-ups
  • Pension doubled target allocation to 10 pct in December

Ventura County Employees’ Retirement Association allocated $135 million across three private equity vehicles in May, nearly tripling the amount the $4.3 billion pension system invested in the asset class over the previous 2 1/2 years, according to pension documents.

The California retirement system committed just $50 million to private equity in 2015 and zero in 2014, according to pension documents. Should it finalize all three commitments, Ventura County will effectively fulfill the $130 million commitment pace it set for 2016 vintage funds.

The commitments remain subject to final negotiations with the general partners, Chief Investment Officer Dan Gallagher told Buyouts.

Ventura County’s May commitments include its first allocation to a direct investment fund. The retirement association committed as much as $15 million to Drive Capital’s second fund, which is seeking $250 million for venture investments in midwestern businesses.

To date, Ventura County seeded its PE portfolio with commitments to secondary strategies and fund-of-funds managed by Adams Street PartnersHarbourVest Partners and Pantheon.

Its recent commitments included re-ups to two of those firms: as much as $60 million for HarbourVest’s Dover Street IX, targeting $3.6 billion for secondaries, and $60 million to Adams Street Partners’ 2016 fund-of-funds.

Ventura County held just 3.6 percent of its total assets in private equity as of March 31, a bit more than a third of its 10 percent target for the asset class. The retirement system doubled the size of its target allocation in December.

Pension consultant NEPC projects the pension could reach its target allocation in the next five to seven years with an “active, annual commitment pace, being mindful of [its] liquidity needs,” according to the county’s May meeting materials.

According to NEPC’s pacing model, Ventura County would likely commit $130 million each year through 2019, at which point annual commitments will rise to $150 million through 2023. Pacing models are subject to change with market conditions.

Ventura County valued its PE portfolio at $154.5 million as of March 31, according to pension documents. The portfolio delivered a 14.5 percent net internal rate of return and 1.29x multiple through the end of last year.

Action Item: Ventura County’s private equity plan: http://bit.ly/1VtCGIP