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Virginia Retirement commits to Abry; PE highest returning asset class

  • Assets Under Management: $77.3 bln
  • PE allocation: 11.5 pct
  • PE target: 10 pct
  • Whom to contact: Ronald Schmitz, chief investment officer [rschmitz@varetire.org]
  • Why this is important: PE continued to drive returns for the LP

Virginia Retirement System at its Jan. 14 meeting disclosed a $35 million commitment to Abry Partners’ ninth fund, targeting $2.1 billion.

Last year Virginia also acquired a combined $31 million of stakes in ABRY Partners VII and VIII on the secondary market, Buyouts reported.

Founded in 1989 by ex-Bain & Co execs Andrew Banks and Royce Yudkoff, Abry invests in lower-middle-market businesses in media, communications and information.

Abry’s PE funds are composed of flagship funds that invest between $50 million and $200 million and heritage funds that invest $20 million to $50 million.

In all, Abry targeted $3.6 billion in fundraising last year. In addition to its ninth fund, Abry was in the market with its fourth advanced securities fund, targeting $1.5 billion in 2018.

Several institutions, including Alameda County Employees’ Retirement Association, Los Angeles City Employees’ Retirement Systemand Illinois Municipal Retirement Fund, committed to at least one Abry fund last year.

Virginia Retirement’s $8.2 billion PE program was tilted almost two-thirds toward buyout strategies (64 percent) and included special situations (11 percent), growth (9 percent), turnarounds (5 percent), venture capital (1 percent) and sub-debt (1 percent) as of June 30, 2018.

The system’s PE portfolio generated the highest returns among all asset classes: 15.9 percent over one year, 14.6 percent over three years, 14.8 percent over five years and 10.8 percent over 10 years, as of Nov. 30, 2018, documents said.

The retirement system’s PE portfolio was overallocated to PE at 11.5 percent, compared with a target allocation of 10 percent, as of Jan. 10, 2019.

Virginia Retirement at the end of 2018 also committed $200 million each to Blackstone Real Estate Partners’s ninth fund and Global Infrastructure Partners’ fourth fund, $50 million to EIG Energy Partners’ 17th energy fund and $150 million to SSG Capital Partners’ fifth fund, documents said.

Action Item: Virginia Retirement’s investments: https://bit.ly/2MgiuKB