Massachusetts’ massive state pension system has made a $150 million commitment to Centerbridge Partners II, which is targeting $3.75 billion. The state’s Pension Reserves Investment Management Board reviewed the commitment this week.
The pension system has committed to Centerbridge in the past, allocating $100 million to its Special Credit Partners fund in October 2009.
The commitment to Centerbridge brings the pension’s total private equity commitments this year to $654 million, leaving another $346 million in possible commitments to make before the end of the year. The $44 billion pension planned on committing $1 billion to private equity during 2010, the former PRIM executive director Michael Travaglini told PEO in a prior interview. The pension’s target allocation to private equity is 10 percent.
Centerbridge Capital Partners II will focus on investments of $50 million to $300 million in North America. The firm’s strategy is “economic-cycle agnostic, allowing the team to focus on buyouts, corporate partnerships, recapitalisations and build-ups during times of economic expansion, and distressed debt opportunities, with an eye toward gaining control, during economic slowdowns and periods of market instability”, the pension said.
Massachusetts is considering a number of private equity funds for commitments before the end of the year, including mid-market buyout funds American Securities Fund VI and Berkshire Partners VIII, both of which have existing relationships with the pension.
American Securities bills itself as one of the oldest private equity firms in existence. The firm started out in 1947 as a family office investment shop founded by William Rosenwald, an heir to the Sears, Roebuck fortune. The firm did “bootstrap” investments that eventually came to be known as leveraged buyouts.
The target amount of Berkshire’s eighth fund could not be determined at press time. The firm invests in consumer products, retailing and related services, business services, transportation, energy, industrial manufacturing and communications. Berkshire closed its seventh fund on $3.1 billion in October 2006.
In October, MassPRIM made more than $300 million in commitments to GTCR X, targeting $3 billion, and Montagu’s fourth fund, targeting $2.6 billion.