Louisiana Teachers reopens after dramatic floods

The $16.57bn Teachers’ Retirement System of Louisiana, which has an 11% allocation to private equity, shut down for a week after worst natural disaster in the US since Hurricane Sandy.

Baton Rouge-based Teachers’ Retirement System of Louisiana (TRSL) reopened Monday after a full week of being shut down due to severe flooding in the region.

TRSL assistant director of operations Dana Vicknair told Private Equity International the $16.57 billion system, which has an 11 percent allocation to private equity, was closed for six business days, beginning 12 August.

Other state agencies in the area were also closed due to floods that the Red Cross has called “the worst natural disaster” in the country since Hurricane Sandy, with about 110,000 homes affected. The Red Cross said it anticipates the recovery to cost $30 million.

“We have a number of employees who are personally impacted; they lost homes, lost cars,” Vicknair said. “We’re trying to help them get back on their feet.”

She added that from a business perspective, the week-long closure did not impact its investment committee’s operations, including meetings and commitments. The most recent board meeting, which includes the investment committee, took place on 4 August.

The main aspect of TRSL operations affected by the closure was pension payments, since some retirees who receive benefits by cheque had evacuated the affected areas, leading to a change in mailing address. Vicknair said the TRSL is updating addresses and temporarily allowing verbal identity verification by retirees looking to receive their payment under a new protocol.

“The protocol wasn’t in place before the week-long closure,” Vicknair said. “We didn’t expect to be out for a whole week.”

The pension fund began investing in private equity in 1995, with a strategy focused on buyout, venture capital and growth equity, according to the TRSL investment policy. It has a 13 percent target to the asset class, according TRSL spokeswoman Lisa Honore.

According to PEI data, the pension also allocates 9.3 percent to real estate, 1.6 percent to infrastructure, and 5.7 percent to private debt. Its overall alternative assets and real estate strategy returned 6.54 percent for the fiscal year ended 30 June 2015, according to the TRSL annual performance data. Information for the most recent fiscal year was not yet available, according to Honore.

TRSL’s recent commitments to private funds include $100 million to Charthouse Capital Partners X, $75 million to OHA Strategic Credit Fund II, $125 million to GSO Capital Opportunities Fund III, $75 million to BC European Capital X, and $75 million to Kohlberg Investors VIII, according to PEI data.