Connecticut outlines 2022 private investment pacing plan

The US public pension is diversifying its private investment exposure, targeting an expansion into SMID buyout and co-investment strategies.

Institution: Connecticut Retirement Plans and Trust Funds
Headquarters: Hartford, United States
AUM: $43.08 billion
Allocation to private equity: 8.1%

Connecticut Retirement Plans and Trust Funds has approved its private equity pacing plan for fiscal year 2022, according to materials from the pension’s June 2021 investment advisory council meeting.

Highlights from Connecticut Retirement Plans and Trust Funds’ June 2021 investment advisory council meeting:

  • CRPTF has outlined its private equity target commitment pacing range for the 2022 fiscal year, with future commitments of between $1.1 billion to $1.3 billion set aside for private equity vehicles. The pension’s current allocation to private equity is 8.1 percent of its full investment portfolio, which equates to just under $3.49 billion in value.
  • The public pension is intending to diversify its private equity portfolio by increasing its target exposure to small and mid-market buyouts from 24 percent to 40-50 percent. CRPTF will also increase its growth equity target exposure from 3 percent to 10-20 percent, alongside introducing a 10-20 percent target exposure to co-investments.
  • To boost its exposure to the aforementioned private equity sub-strategies, CRPTF is reducing its target exposure to venture capital investment from 17 percent to 5-10 percent. The pension will also cease entirely its investment in fund-of-funds and multi-strategy vehicles, which currently make up a combined 8 percent of CRPTF’s total private equity exposure.
  • Geographically, CRPTF will slightly reduce its regional exposure to North American private equity investments from its former target of 86 percent to 65-85 percent. This shift in policy will create space for an increase in Western Europe and rest of the world investments from 13 percent to 15-25 percent and 1 percent to 5-10 percent respectively.

CRPTF’s private equity commitments for fiscal year 2021 focused predominantly on North American investment vehicles, largely comprising medium and large buyout strategies. Average ticket sizes fluctuated between $35 million and $100 million, with a peak commitment of $150 million to Vistria Fund IV in May 2021.

Other recent private equity commitments confirmed by CRPTF include $100 million to Avance Investment Partners and $75 million to a co-investment sidecar managed by Hg.

Mark Evans is the principal investment officer for private equity and private credit at CRPTF, maintaining primary management and oversight responsibility for the joint portfolios which represent approximately $6 billion of exposure across multiple private capital strategies. Evans has more than 25 years of private debt and equity investment experience as both a limited and general partner, including leading fund, direct, and co-investments.

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