Louisiana commits $100m to private equity

 The retirement system will commit $25m to EnCap Flatrock and $75m to Vista Equity Partners.  

The Teachers’ Retirement System of Louisiana has committed $100 million to two private equity funds, according to documents from the system’s Friday meeting.

Louisiana approved a $75 million commitment to Vista Equity Partners’ Fund V and $25 million to EnCap’s Flatrock Midstream Fund III. Vista’s fifth fund launched in February and has a $3.5 billion target and no official hard-cap. Fund V could raise up to $5 billion and is expected to be oversubscribed, Private Equity International previously reported.

Fund V will focus on investments in US-based technology companies with enterprise values of between $200 million and $3 billion. Other limited partners in Fund V include the New Jersey Division of Investment and the Los Angeles County Employees Retirement System, both of which committed $200 million each to the fund in March, according to PEI’s Research and Analytics division.

EnCap Flatrock was formed in 2008 through a partnership between EnCap and Flatrock Energy Advisors, and is focused on midstream oil and gas investments. The third EnCap Flatrock fund has a $2.25 billion target, according to PEI data.

The Louisiana Senate recently voted to change parts of how state retirement systems will be funded. According to The New Orleans Advocate, Senate Bill 26 would require schools to pay up front for the administrative costs of both retirement systems. Currently, administrative costs are amortized over 30 years, which results in hefty interest payments. The bill passed unanimously and is expected to have equal treatment in the House. State finance officials say the move will bring Louisiana’s retirement systems in-line with national best practices on funding.

Louisiana expects to commit between $900 million and $1.1 billion to alternatives during the fiscal year ending 30 June 2014. The Baton Rouge-based pension fund has invested $925 million to date.