The Teachers’ Retirement System of Louisiana’s Board of Trustees approved a $75 million commitment to KPS Special Situations Fund IV at its meeting Tuesday, a spokesperson told Private Equity International.
KPS is reportedly targeting $3 billion for its fourth fund, which will make control investments in basic manufacturing, transportation and service businesses. The firm’s strategy typically includes corporate divestitures and carve-outs, operational turnarounds, financial restructurings, businesses operating in bankruptcies and companies in out-of-favour industries.
KPS Special Situations Fund III, a $1.2 billion 2007 vintage, was generating a 19.3 percent net internal rate of return and a 1.46x investment multiple as of 30 June, according to California Public Employees’ Retirement System documents.
Louisiana Teachers’ $75 million commitment to KPS mirrors that made by the New Mexico State Investment Council last month.
“Historically they’ve had top quartile funds in all their previous funds,” New Mexico SIC spokesperson Charles Wollman told Private Equity International at the time. “They’ve had very solid performance in years that are traditionally not great years for buyout funds. They’re basically one of the best performing funds in [our] entire portfolio.”
In January, KPS recapitalised portfolio company WWRD Holdings, which generated a $50 million cash distribution for the company’s stockholders. The $167.5 million recapitalisation included a $117.5 million asset-based revolving credit facility and a $50 million term loan, according to a statement.
With this most recent distribution, WWRD has distributed approximately $66 million in cash to its stockholders in the last 15 months. All WWRD common stock is held by KPS, firm co-investors and company management.