CalSTRS closes 2011 with $506m in commitments

The California State Teachers’ Retirement System bet heavily on Asia, bringing its total allocation to the asset class to nearly $2bn for 2011.

The California State Teachers’ Retirement System committed $506.4 million to private equity over the course of the fourth quarter, according to a report released by the system’s investment committee. 

CalSTRS increased its private equity commitment pace substantially over 2010, investing $1.4 billion through the first three quarters in addition to the $506 million committed at the end of the year. In 2010, CalSTRS limited its investment in private equity to only $900 million. 

The $152 billion retirement system is one of private equity’s most prominent limited partners. Last year, its allocation through the third quarter represented 0.4 percent of the industry’s overall commitments to that point, according to documents.  

CalSTRS made its fourth quarter commitments across eight funds, with the largest investment of $125 million going to PAG Asia I. PAG held a first close on the fund, targeting $2.5 billion, at $1.7 billion last July. It is unclear if the fund has held a final close. 

The retirement system’s exposure to Asia wasn’t limited to PAG. CalSTRS also committed $75 million to Hony Capital’s fifth fund. Hony closed that fund on $2.4 billion earlier this year. Fund V will focus on cross-border deals and expanding Chinese companies oversees, according to the firm. 

In addition to Hony and PAG, CalSTRS fourth quarter commitments included Wing Holdings I ($40 million), EnCap Energy Capital VIII co-investors ($50 million), Oaktree European Principal Fund III ($75 million), ACON Equity Partners III ($70 million) and TPG Opportunities Partners II ($35.4 million). The retirement system also committed $36 million to a fund referred to as Blackstone Eagle Prin Tran Ptns.

CalSTRS lost veteran private equity portfolio manager Pascal Villiger earlier this year. Villiger managed and monitored $5.5 billion in committed capital for CalSTRS and sat on the advisory boards of firms like Apollo Global Management, Bain Capital, Madison Dearborn and GSO Capital Partners. He left the retirement system to join family office Medley Partners.