Arizona commits $100m to energy funds

The $28.3bn retirement system gave $50m each to a pair of debut energy and natural resources funds from Apollo Global Management and The Blackstone Group.

The Arizona Retirement System committed $100 million across two energy sector funds at its May meeting, according to retirement system spokesperson Tamera Wilson. 

The $28.3 billion retirement system committed $50 million to both Blackstone Energy Partners and Apollo Natural Resources, Wilson said. 

Apollo’s debut natural resources fund will invest less than $150 million per deal in natural resources, energy, mining and agricultural sectors. The fund had raised at least $256 million as of 1 September, 2011, according to a US Securities and Exchange Commission filing. A fund target was not listed. 

GSA Capital Associates is listed as an associated broker or dealer on the fund.  

Deals made through the natural resources fund may also include equity from Apollo Investment Fund VII, a $14.9 billion 2008 vintage. Fund VII was generating a 12.5 percent net internal rate of return and 1.3x investment multiple as of 30 September, 2011, according to the California Public Employees’ Retirement System

The Blackstone Group launched its first energy fund last year and held an interim close on $1.5 billion during the first quarter of 2012, Blackstone Group president Tony James said in an April earnings call. 

The firm has been very active in the energy sector this year, having invested $2 billion deal in Cheniere Energy Partners, which will allow the company to construct a gas-liquefaction plan for export markets. 

Arizona also made a $10 million commitment to Khosla Ventures’ Seed Fund B at the May meeting.  

The state retirement system’s $786 million private equity portfolio generated a one-year rate of return of 17.1 percent during the 2010-2011 fiscal year, according to state documents.