The Alaska Retirement Management Board is targeting $560 million in private equity commitments for 2017, up from the $530 million target in 2016, according to materials for its 20 April board meeting.
The $23.8 billion pension fund, which had 8.2 percent of its total assets in private equity at the end of 2016, has slightly increased its commitment pacing plan for this year as part of its plan to reach its 12 percent long-term private equity target allocation in 10 years.
Juneau, Alaska-based ARMB expects to slowly increase its annual commitment target to private equity, reaching $675 million by 2021 and maintaining that level to reach the 12 percent target allocation in 2026.
ARMB, which invests in private equity through an investment committee and external consultants Abbott Capital Management and Pathway Capital Management, ended up making 41 commitments worth $577.7 million – higher than the target – to private equity in 2016.
Although the materials did not specify the likelihood of the pension fund surpassing its target commitment amount again for this year, they did indicate that “fundraising has been relatively stable for the past several years and is expected to continue at roughly the same pace since many firms have been actively returning capital and the investment pace has picked up over the past two years”.
The 2016 commitments consisted of 24 percent in venture capital funds, 42 percent in buyout funds and 34 percent in special situations vehicles, the three strategies that make up ARMB’s private equity portfolio. The pension has a target allocation mix of 25 percent in venture, 45 percent in buyout and 30 percent in special situations.
For 2017, ARMB has given Abbott and Pathway each $205 million to commit to private equity on its behalf, and plans to commit $150 million on its own, though the two consultants can commit up to 50 percent more than the allocated amount.
So far this year, ARMB has committed $78 million to nine funds, including Clayton, Dubilier & Rice X, which closed this month on its $9.35 billion hard-cap, and EnCap XI, an energy-focused special situation fund in market with a $6.5 billion target, the materials showed.