NJ pension sees record quarterly distribution in Q3

The New Jersey Division of Investment received $680 million in distributions in the third quarter, a record amount since the inception of its private equity programme. This aligns with record distributions seen overall in 2014.

In line with the record cash distributions from fund managers in recent months, the New Jersey State Investment Council announced that its private equity portfolio received its largest quarterly distribution amount to-date in the third quarter.

At its 18 November meeting, the New Jersey State Investment Council said its Division of Investment received $680 million in distributions in Q3 with the largest from TPG related to the sale of Par Pharmaceuticals.

The Division had exposure to the pharmaceutical company through TPG VI and a co-investment and received a $83 million cash distribution. The investment generated a gross multiple of 6.8x and an internal rate of return of 95 percent.

Since the start of fiscal year 2013, its private equity portfolio has generated more than $1.8 billion in net distributions.

According to Cambridge Associates research, 2014 saw the highest annual capital distributions in the history of its PE benchmark index, with fund managers returning $153.5 billion to their limited partners, as reported by Private Equity International. This was $19.4 billion, or 14 percent, higher than the amount from 2013.

Fund advisory Triago noted in its April quarterly report that record cash distributions from realised investments along with investors seeking higher returns than on offer in the public markets has created a “fundraising boom.”

Last year general partners distributed a record $477 billion in cash to LPs, a 39 percent jump from the amount in 2013, and 215 percent more than the six-year average, it said.

In the first quarter of 2015, GPs distributed almost $126 million, an all-time high for this period and a 28 percent increase year-over-year.
Bain & Company, in its 2015 private equity report, wrote that GPs exiting investments have allowed distributions to outpace capital calls, given a sluggish deal-making environment.

In the US and Europe, distributions have surpassed new cash calls each year beginning in 2011, Bain said. Last year, investors with exposure to US buyouts received $2.40 per dollar called, while in Europe, they received $2 for every dollar.