NY Teachers' makes $90m bet on mid-market

The pension, which reported assets of $95.8bn at the end of 2008, has committed money to Wynnchurch Capital Partners and Sterling Group Partners.

The New York State Teachers’ Retirement System has committed $90 million to mid-market buyout firms Wynnchurch Capital Partners and Sterling Group Partners.

The pension, which had assets of $95.8 billion at the end of 2008, invested $65 million in Sterling’s third mid-market buyout fund. Sterling Group Partners III is targeting $600 million and the firm is raising $150 million for a parallel fund.

Sterling, founded in 1982, targets deals in the mid-market ranging in size from $100 million to $500 million. The firm raised its first institutional fund in 2001 with commitments of $120 million. Sterling closed its second fund in 2005 on $470 million.

Wynnchurch is targeting $500 million for its third fund. The firm targets investments in companies with up to $500 million in revenues. The firm collected $350 million for its prior fund, which closed oversubscribed in 2006.

NYS Teachers’ pension also this week promoted its head of private equity investing, Dhvani Shah, to a newly created executive level position called managing director of private equity. A spokesman said Shah’s job will not change. The pension hired Shah last March from Bank of America, where she worked as a vice president working on private equity investments.

Shah and two other people make up the pension’s private equity team. NYS Teachers’ uses StepStone Group as its private equity consultant. The pension voted earlier this week to extend StepStone’s contract for another year.

Several US pensions have recently targeted US mid-market-focused private equity firms for commitments. The School Employees’ Retirement System of Ohio earlier this month committed $80 million to two firms that invest in the mid-market, Francisco Partners and Mason Wells.