The $11.9 billion Louisiana Teachers’ Retirement System has committed up to $35 million to Pharos Capital Partners III and up to $50 million to Providence TMT Special Situations Fund II. In total, the pension has set aside $245 million to invest in private equity in fiscal 2011.
Providence TMT Special Situations Fund II began marketing last year and is targeting $1 billion. In July, the fund received a $20 million commitment from The Los Angeles City Employees’ Retirement System. It also received a $200 million commitment from the Florida State Board of Administration. Providence’s debut debt fund closed in 2008 with $1.14 billion in commitments.
It’s unclear how much Pharos is targeting for its third fund. Fund II closed on $400 million in 2008. The firm originally closed its second fund in 2005, but reopened it for additional commitments in 2008.
Louisiana Teachers’ chief investment officer Philip Griffith told PEO that investing with Pharos’ fund would help the pension achieve its goal of diversification between large, mid, and small-capitalisation investments. “[Pharos] fills the middle market buyout space for us,” he said. “Providence continues to fill out the debt-related space that we’re currently under-allocated to.”
Louisiana Teachers’ currently has an 8 percent target allocation to the asset class and a 6 percent actual allocation. The pension began investing in debt in 2008 after conducting an asset-allocation study, Griffith said.
In July, Louisiana Teachers’ committed $100 million to Energy Capital Partners II, which is targeting $3.5 billion. So far this year, the pension has committed to some smaller funds, directing approximately $50 million to Gilde Buy-Out Partners IV in June and $35 million to Enhanced Equity in January.
The pension is over-weighted to private equity, with a target of 10 percent and an actual allocation of 13.2 percent. There is no plan to sell any private equity assets on the secondaries market, Griffith said.