Everything is bigger in Texas: TCDRS pledges $426m to VC

Texas County & District Retirement System committed to 12 funds, including those managed by CRV, DCVC, IDG, Joy Capital and OpenView.

Texas County & District Retirement System continues to develop its robust private equity program, pledging more than $426 million to a dozen venture funds this year.

With a current private equity allocation of 27 percent, the $44 billion system has one of the largest exposures of any public system in the country, according to the system’s monthly report for September.

Closed commitments made by Texas this year include:

  • $100 million to DCVC VI, a tech-focused fund managed by DCVC of Palo Alto, California.
  • $70 million to Orbimed Private Investments IX, a healthcare and life sciences VC fund managed by PE firm Orbimed of New York.
  • $55 million to Joy Capital IV, the fourth flagship fund managed by Joy Capital, a tech investor based in Beijing.
  • $50 million to IDG China Venture Capital Fund VII, a tech-focused fund managed by IDG Capital of Beijing.
  • $30 million to OpenView Venture Partners VII, a software-focused fund managed by OpenView Venture Partners of Boston.
  • $25 million to The Column Group V, the fifth flagship fund focused on drug discovery from The Column Group of San Francisco.
  • $25 million to The Column Group Opportunity III.
  • $22 million to Shine Capital II, a web3-focused fund managed by Shine Capital of New York.
  • $20 million to CRV XIX, the 19th flagship fund of CRV, formerly Charles River Ventures, of San Francisco and Boston.
  • $14 million to Threshold Ventures IV, a tech-focused fund managed by Threshold Ventures of Menlo Park, California.
  • $10 million to Shine Capital Opportunities Fund I, and
  • $5 million to CRV Select Fund II.

Texas County is continuing to build out its private equity holdings with another 14 pending commitments undergoing due diligence, according to a presentation from adviser Cliffwater included in the September report.

Texas County allocates 45 percent to buyouts, 24 percent to venture capital, 21 percent to non-US investments, nine percent to energy and 1 percent to co-investments, according to Cliffwater.

Valuations increased by $2.6 billion for the year ending March 31, although results were mixed in the first quarter, according to the report.

The private equity program has returned 17.3 percent for the year ending March 31, according to the presentation.

A strong exit market led to more than $7.8 billion in distributions for the year, according to Cliffwater.

The system has steadily increased its target to private equity over the past several years.

It eclipsed over $1 billion in commitments since the 2018 vintage year, according to Cliffwater. Texas County committed more than $2 billion for the 2020 and 2021 vintage years.

The private equity portfolio contained 5,019 companies, with 37 percent of those classified as IT firms, according to the report. North American firms make up 72 percent of these companies, with another 14 percent located in Western Europe and 9 percent in Asia, according to Cliffwater.

Potential commitments undergoing due diligence include the following funds:

  • Clairvest VII.
  • Cortec VIII.
  • Gemspring III.
  • Genstar XI and Opps II.
  • Greenbriar VI.
  • Hellman & Friedman XI.
  • Linden Co-Invest I.
  • Parthenon VII.
  • Sverica VI.
  • TA XV & Select Opps III.
  • Vistria V.
  • ZMC IV.
  • Glide Healthcare Venture & Growth VI.
  • Summit Europe IV.

Additional reporting by Lawrence Aragon