Illinois Municipal commits $125m to private equity

The $33bn system committed to Vista Equity Partners and five mid-market funds. 

The Illinois Municipal Retirement Fund committed $125 million to six private equity funds, according to documents from the pension’s board meeting last Friday.

The system committed $100 million to Vista Equity Partners Fund V and committed $5 million each to five mid-market funds. All five funds represent new relationships for Illinois.

Vista Equity Partners’ fifth fund launched this year with a $3.5 billion target, according to Private Equity International’s Research and Analytics division. Limited partners in Fund V include the Teachers’ Retirement System of Illinois and the New Mexico State Investment Council. Vista’s prior fund closed on $3.5 billion, surpassing its $2.5 billion target in 2011.

Vista invests in companies that develop proprietary software solutions, such as auto retailer software Reynolds & Reynolds and grant-making software company MicroEdge, according to the firm’s website. Last July, Illinois committed up to $50 to Vista’s debut credit vehicle, Vista Credit Opportunities Fund I, which has a $600 million target and focuses on first and second lien loans for enterprise software companies. The fund has raised $120 million, according to PEI data.

Illinois committed a total of $25 million to five mid-market firms that qualify as minority, female or persons with a disability owned business. The system invested $5 million in AUA Private Equity Partners’ debut fund, which is targeting $200 million, according to PEI data. AUA invests in companies in the consumer, media and business sectors, as well as Hispanic-oriented companies and family-owned businesses, according to the firm’s website. The firm was founded in 2012 and is led by managing director Andy Unanue, former chief operating officer of Hispanic-owned food company Goya Foods.

Illinois committed $5 million to Estancia Capital Partners’ debut fund, which launched in 2011 with a $200 million target, according to PEI data. Estancia invests in lower mid-market asset management and business services companies.

The other three $5 million commitments went to Goldman Sachs Merchant Banking spin-out New Maintream Capital, whose second fund is targeting $250 million for investments in the healthcare, consumer services and business services sectors; Valor Equity Partners’ Fund III, which is seeking $300 million for investments in the consumer, infrastructure and manufacturing sectors; and Vistria Fund which specialises in US mid-market buyouts in education, healthcare and financial services, according to media reports.

Illinois’ other alternatives investments included $50 million to ABRY Partners’ senior debt fund, Advanced Securities Fund III, a mezzanine fund that launched this year with a $1 billion target. The firm’s prior senior debt fund closed on $1.2 billion in 2011, just below its $1.3 billion target. ABRY’s advanced securities funds provide senior debt capital to media, communications and information services companies.

Illinois has a 9 percent target allocation to alternatives, which includes private equity, absolute return, agriculture and timberland, and a 5.3 percent actual allocation, as of 31 January, according to the meeting documents. Illinois has about $33 billion of assets as of 31 December, according to its website.