LP Briefs, November 2008

Harvard hopes to net $1B from secondary sale

Harvard University has retained Cogent Partners to pitch what could be one of the largest secondary sales of all time, with an optimistic asking price in excess of $1 billion, according to multiple sources. The available portfolio includes a variety of venture capital and buyouts funds, albeit none of its crème de la crème VC holdings (i.e., funds from Sequoia Capital or Kleiner Perkins Caufield & Byers). Harvard and Cogent declined to comment. —Dan PrimackMaryland has plenty more to spend

Despite a busy summer of commitments, the $36.7 billion Maryland State Retirement and Pension System still has a long way to go to ramp up its exposure to private equity. The pension fund has more than $1 billion available to spend on the asset class, with no prescribed investment pace, according to a performance report for the period ended July 31.

The state pension fund had $666.83 million invested in private equity, or 1.9% of its total value. The pension fund’s target allocation for private equity is 5 percent. (It isn’t clear how the steep drop in the stock markets in September and October affected its allocation.)

The state pension fund has been active lately, committing about $488 million to eight private equity funds between April and August, with pledge sizes ranging from $25 million to $150 million, to a diverse set of U.S. and European private equity funds, says Dean Kenderdine, executive director of the LP.

Its portfolio is weighted heavily with buyout and venture funds, but also includes funds earmarked for growth, distressed (control and non-control), mezzanine, secondary and energy and natural resources investments.

Recent commitments include $25 million to Longitude Venture Partners, $150 million to Madison Dearborn Capital Partners and $80 million to CVC European Equity Partners. —Nancy GordonPSERS pledges $80M

The $33 billion Pennsylvania State Employees’ Retirement System has re-upped with three general partners, including Morgenthaler Venture Partners. However, it slightly scaled back the level of its commitments.

The pension fund committed up to $20 million to Morgenthaler Venture Partners IX, $15 million less than it committed to fund VIII. Fund IX, which has a target of $400 million, will invest in life science and information technology companies. As of August, it had gathered $374 million in commitments from 51 backers.

PennSERS also committed to two buyout funds: First Reserve Corp. and Brynwood Partners. It committed up to $50 million to First Reserve Fund XII, which is trying to raise $12 billion. That was $10 million less than PennSERS committed to First Reserve XI. PennSERS also committed up to $10 million to Brynwood Partners VI, which has a target of $400 million. That was the same amount it promised to fund V. —Nancy Gordon

Fresno County study advocates boosting PE allocation

A recent asset allocation study for the $2.7 billion Fresno County Employees’ Retirement Association has determined that a slight boost to the group’s private equity target allocation is in order. The study found the target should be increased to 7%, with an 8% maximum.

The current allocation is 4.6%, or about $135 million. The study forecasts that the LP could achieve a return of 10.7% for private equity over the next 10 years.

“An implementation plan is in the works, and I hope to present it to the board in the fall,” says Roberto L. Peña, retirement administrator. —Nancy Gordon

Philly looks at Eastern Europe, Asia

The City of Philadelphia Board of Pensions and Retirement is looking to build a globally diversified portfolio, and has its eye on opportunities in Eastern Europe, including the Czech Republic, Romania and Bulgaria, as well as in Japan, South Korea and Australia.

Philly has 19% of its alternative portfolio in Western Europe, 1% in Latin America, as part of a global fund, and some exposure to Australia and Turkey. It has made commitments to Edinburgh, Scotland-based SL Capital Partners’ European Strategic Partners I and II, which are European funds of funds earmarked for international investment opportunities. The pension plan also committed $21 million to The Carlyle Group’s Carlyle Europe Partners III, a 2006-era fund which invests in leveraged buyout transactions in Europe. —Nancy Gordon

Washington bets on Europe, China

The latest round of commitments from the $60 billion Washington State Investment Board (WSIB) demonstrates its continued appetite for international investments.

The limited partner re-upped with London-based Charterhouse Capital Partners, but also added to two firms—Triton Partners and FountainVest China Growth Capital Fund—to gain exposure abroad. The LP committed up to $300 million to Charterhouse Capital Partners IX; up to $215 million to Triton Fund III; and up to $50 million to FountainVest China Growth Capital Fund. —Nancy Gordon