Louisiana Teachers' has $245m for private equity

The $11.4bn pension, which committed $100m to Energy Capital Partners II in July, set aside $245m for private equity in fiscal 2011, and $350m for debt-related vehicles.

The $11.4 billion Louisiana Teachers’ Retirement System has committed $100 million to Energy Capital Partners II, and has set out $245 million to spend on private equity over the next year.

The pension made the commitment to Energy Capital, which is targeting $3.5 billion, last month. This week, the pension worked with its consultant Hamilton Lane to create its annual investment plan.

Private equity will get $245 million, according to Philip Griffith, chief investment officer with Louisiana Teachers’. Louisiana Teachers’ this year has committed to some smaller funds, directing €37.5 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.

We've historically had a real estate portfolio. We've made commitments for the last 10 years … a lot of these [firms] have not made any [investments]. And they haven't been sending anything back.

Philip Griffith

The pension will use about $305 million for commitments to “real assets” vehicles, which include real estate, infrastructure and commodities. The capital will mostly target infrastructure and commodities funds, Griffith said, adding the pension hasn’t committed to a real estate fund since early last year. The pension did commit $50 million this year to Blackstone Real Estate Special Sitautions Fund II, but Griffith said the pension considers that a debt-related fund. 

“We’ve historically had a real estate portfolio. We’ve made commitments for the last 10 years … a lot of these [firms] have not made any [investments],” Griffith said. “And they haven’t been sending anything back.”

Real assets has a target allocation of 9 percent, and an actual allocation of 5.6 percent.

Louisiana Teachers’ is reserving $350 million for commitments to debt and credit vehicles, which account for the bulk of the pension’s commitments this year. Already, the pension has committed to American Securities Opportunities Fund II, Blackstone Real Estate Special Situations Fund II, Merit Mezzanine Fund V, OHA Strategic Credit Fund and Peninsula Fund V.