NY State pension commits $1.5bn to tech funds

The New York State Common Retirement Fund committed $1.46bn to five different tech-focused private equity funds so far in 2016.

More than one-third of the number of commitments that the New York State Common Retirement Fund (CRF) has made so far this year were in tech-focused funds.

The $178 billion pension fund, which is the third largest in the US, committed $1.46 billion to five different tech-focused funds out of the total 14 commitments it has made so far this year.

It committed $500 million in March to Vista Equity Partners VI, which invests in North America-based software companies. Vista's sixth flagship fund launched in February and has so far raised $5.78 billion of its $8 billion target, according to PEI Research & Analytics. Other limited partners that committed as much as CRF to the fund include Oregon Public Employees' Retirement System and Oregon State Treasury, according to PEI data.

In April, the CRF launched a new partnership with a $400 million commitment to Thoma Bravo Fund XII. The 12 th flagship fund from Thoma Bravo launched in November and is targeting $7 billion, according to PEI data. Investment disclosure documents from the CRF indicate this fund has a main focus on the US software sector.

The pension fund also allocated the same amount the following month to a different fund from Vista Equity Partners, Vista Foundation Fund III, which seeks to invest in enterprise software companies. This fund is specifically focused on technology in the lower and mid-market and is targeting $2.5 billion, according to documents from the State of New Jersey Division of Investment.

That same month, in May, the CRF made commitments to two investment vehicles managed by CVC Capital Partners. It committed $125 million to CVC Growth Fund, which seeks software and technology-enabled business services companies in North America and Western Europe, and $31 million to CVC Growth Co-Investment Fund, which follows the same strategy but for LP access to co-investments. CVC Growth Fund surpassed its $750 million target to hold a February final close on $1 billion, which includes the co-investment commitments, CVC said at the time.

The disclosure documents said no placement agent was used for any of these fund commitments.

The CRF invests in private equity through funds and separately managed accounts and allocates 7.8 percent, or $13.9 billion, to the asset class as of 31 March, according to the CRF website.

For the fiscal year ending 31 March 2015, the CRF's private equity portfolio returned 9.2 percent, according to PEI Research & Analytics. Data for the most recent fiscal year was not available on its website as of press time. Outside of private equity, the CRF also invests in debt, real assets and public equities, among others.

CRF's nine other private equity commitments since the beginning of the year include large tickets to Warburg Pincus Capital Partners XII, which has a growth-oriented strategy in the Americas, and to KKR Americas Fund XII, as noted on the pension plan's investment documents.