LP Briefs, October 2010

NM Pension to Spend up to $150M Next Year

The New Mexico Public Employees Retirement Association may spend $100 million to $150 million in 2011 on private equity commitments on its climb toward its 5% target allocation, says Chief Investment Officer Joelle Mevi.

Cliffwater, the pension’s alternative asset consultant, will likely recommend that range, Mevi says.

The state pension fund had a busy summer, pledging more than $100 million to four private equity funds, displaying an interest in energy, technology, venture capital and European buyouts, as it approaches the half-way mark on its way toward its target private equity allocation. The actual amount it has invested stands at 2.4 percent.

In venture capital, the LP pledged $20 million to the late stage venture capital and growth equity investment fund raised by Institutional Venture Partners. (The VC firm raised $750 million for its 13th fund.)

Previously this year, the New Mexico pension fund approved a $25 million commitment to EnCap Energy Capital Fund VIII; $20 million to another energy vehicle, EnerVest Energy Institutional Fund XII; and the tech-focused buyout and growth equity firm JMI Equity Partners got a pledge from the pension fund of $20 million for its seventh fund. Also, Netherlands-based Gilde Buy Out Partners received a slug of $18.6 million for its fourth fund, earmarked for mid-market deals in Western Europe. —Nancy GordonSiguler Guff Raises $217M for FoF

New York City-based funds-of-funds manager Siguler Guff has raised $217 million for its Siguler Guff Distressed Opportunities Fund IV, according to a regulatory filing. The firm launched the vehicle earlier this year with a target of $1.5 billion.

The New Hampshire Retirement System has committed $20 million to the fund and the San Antonio Fire and Police Pension Fund has pledged $10 million.

For Fund IV, Siguler Guff is charging a 1% management fee, 5% carried interest on fund investments and 15% on direct investments after an 8% preferred return, according to a San Antonio pension fund document.

Siguler Guff raised $595 million for its first distressed vehicle in 2002. That fund generated a net IRR of 8.28% and an investment multiple of 1.35, as of March 31, 2009, according to documents from Rollins College, an LP in the fund of funds. —Nancy Gordon

West Virginia Plans One $25M VC Commitment in Next 12 Months

The $10.5 billion West Virginia Investment Management Board intends to pledge $285 million to private equity over the next 12 months, saya Private and Public Equity Investment Officer Jim Herrington.

The plan is to make five to six commitments of $40 million to $50 million each, most likely to small to mid-market buyout shops, and one $25 million commitment to a venture capital firm, Herrington says.

The state pension fund has pledged $110 million to three firms so far in 2010, including a $25 million slug that went to Franklin Park Venture Series 2010, a venture capital fund of funds.

In addition, the LP invested $50 million in Wellspring Capital Partners V and $35 million to Mason Wells Buyout Fund III.

A relative newcomer to the private equity asset class, the West Virginia Investment Management Board began implementing its program in 2008. —Nancy Gordon

Harvard Endowment Manager Plans to Cut Back on PE and VCJane Mendillo, who manages Harvard University’s endowment fund, is disenchanted with private equity, despite a 16.2% return in the asset class, according to a Wall Street Journal report last month.

The nation’s largest college endowment (ranked by assets) is now valued at $27.4 billion, up from $26 billion a year earlier, the story said. Over the past decade, the Harvard endowment invested heavily in buyout funds, but the field “has become more and more crowded—with capital, with managers and with investors,” Mendillo told the WSJ.

Returns will be more muted going forward while future investments in private equity will stress quality rather than quantity, Mendillo said. She anticipates that the endowment will reduce the number of active relationships within its PE and VC portfolio.

Real estate proved to be the biggest drag on the endowment’s performance, driving a negative 2.7% in real assets, which includes commodities and natural resources, such as timber, according to the report. —Reuters