LP briefs, February 2007

Illinois TRS seeks advisor

The Teachers’ Retirement System of Illinois is searching for an advisor to help reach a recently raised PE allocation of 8 percent.

In December, the board voted to raise the allocation from the 6% level that was set in 2005. The pension fund had about $1.5 billion (or 4%) of its $37.4 billion in assets invested in private equity as of Sept. 30. About half of that is invested in buyouts, with the rest in venture capital (32%), subordinated debt (6%), distressed debt (6%) and special situations (5%).

The TRS private equity portfolio returned 27.72% during the one-year period ended Sept. 30.

The TRS board still employs turnover-plagued Pacific Corporate Group (PCG). Stan Rupnik, spokesman for the pension fund, says that the request for proposal was issued to make certain PCG is “still the best fit for our program given their organizational changes.” In May, TRS Illinois hired La Jolla, Calif.-based PCG as its first consultant specializing solely in private equity. PCG consultant Tom Keck helped to bring TRS Illinois $150 million worth of private equity commitments, including a $50 million commitment at the end of last year to J.C. Flowers II, a buyout fund focused on financial services. The fund is managed by J.C. Flowers & Co. in New York.

The pension fund also agreed to a $100 million commitment to fund VI of Providence Equity Partners, a buyout firm focused on media and telecommunications.

But Keck, whom TRS Illinois considered to be its lead consultant at PCG, left in December. He was the second lead consultant to leave PCG in just under three months.

CalPERS approves 5 investments

The California Public Employees’ Retirement System recently approved five new fund commitments: $500 million to First Reserve Fund XI; $127 million to Richardson Capital Private Equity 2; $93 million to Tricor Pacific Capital Partners IV; $160 million to Carlyle Japan Partners II; and $50 million to Acon-Bastion Partners II.

MassPRIM issues RFP

The Massachusetts Pension Reserves Investment Management Board has issued an RFP for managers who will invest in opportunities that will “benefit the economic climate of” Massachusetts. This includes alternative asset managers, such as venture capital and buyout funds. Proposals are due by March 9.

CoPERA hunts for director

Chris Reilly resigned at the end of 2006 as head of alternative investments for the Colorado Public Employees’ Retirement Association to join the family office of Kemnay Advisory Services. He joined the pension fund in early 2004. In the interim, CIO Jennifer Paquette is handling Reilly’s responsibilities.

Washington pension fund backs KKR

The Washington State Investment Board in January gave preliminary approval for a $500 million commitment to Kohlberg Kravis Roberts & Co.’s first fund focused exclusively on Asian buyouts. KKR Asian Fund LP, which has a target of $4 billion, plans to invest in Japan, China, Hong Kong, Taiwan, Australia and New Zealand.

The Washington investment board has committed a total of $4.1 billion to KKR since 1982, producing $6.2 billion in realized proceeds and $4.4 billion in profits, according to the state pension fund. —VCJ staff