Institution: Teachers’ Retirement System of Louisiana
Headquarters: Baton Rouge, US
AUM: $22.82 billion
Allocation to private equity: 18%
Teachers’ Retirement System of Louisiana has set out its proposed private equity capital commitment pacing plans for January-June 2021, according to documents provided by the pension to Private Equity International.
Highlights from TRSL’s January 2021 investment committee documents:
- TRSL’s target commitment allocation to private equity in the fiscal year June 2020 to June 2021 is segmented into two sub-strategies: buyout and venture capital.
- The target commitment allocation for buyout investments is $400 million-$500 million across five to seven funds.
- The pension’s target commitment allocation for venture capital is $100 million-$150 million, also across five to seven funds. Overall target commitment allocation for the wider private equity asset class is $500 million-$650 million.
- Between June and December 2020, the pension made just $100 million-worth of commitments to two private equity vehicles: $50 million each to an early-stage separate account with an undisclosed manager and to venture manager TCV’s 11th flagship fund.
- $200 million-worth of capital was committed to private equity funds in the January 2021 meeting: $100 million each to buyout funds Charterhouse Capital Partners XI and Thomas H Lee Equity Fund IX.
- For the pension to achieve its fiscal year target commitment allocation, $200 million-$350 million more can be expected to be committed to the asset class by June 2021.
- Despite targeting $500 million-$650 million in fiscal private equity commitments, the pension is overweight in its current allocation to the asset class by four percentage points. Target allocation is 14 percent of TRSL’s total portfolio, whereas current allocation stands at 18 percent.
According to TRSL’s 2020 CAFR, the private equity asset class’s expected long-term real rate of return for 2020 was 8.62 percent. This was marginally higher in 2019, with expected returns of 8.67 percent. Private equity is consistently the pension’s best-performing asset class.
Philip Griffith is the CIO of Teachers’ Retirement System of Louisiana. Griffith has been in the position since April 2007, and previously worked as CIO at Louisiana State University Foundation, the institution’s primary private endowment. TRSL’s investment consultant for private markets is Hamilton Lane, with the firm’s responsibilities spanning private equity, real estate, private debt, infrastructure, commodities and farmland.
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