OPERS commits $210m across two funds in Q1

The Ohio-based pension fund expects to commit $1.4bn to private equity this year.

The Ohio Public Employees Retirement System committed $210 million in the first quarter out of a total of $1.4 billion it plans to invest in private equity in 2015, according to OPERS’ quarterly alternatives report. The update was released at its board meeting in mid-August.

In the first quarter ended 31 March, OPERS committed $200 million to Top Tier Investments Fund VII and an additional $10 million to Permal Private Equity Opportunities Fund V.

At the end of the quarter, OPERS’ PE portfolio market value was $9.2 billion and accounted for 11.7 percent of its total fund size of $87.89 billion. Its target allocation is 10 percent.

OPERS has invested in 177 private equity funds through 75 managers: 64 of those funds are investing, 77 harvesting, 22 liquidating and 14 are complete

It invests capital mostly into the consumer discretionary sector, which represents 17.1 percent of its total PE commitments, and in North America, which accounts for 63.3 percent of all commitments by region.

Its top fund manager is Ardian, which has 10 funds that received OPERS’ commitments worth $1.43 billion. It is followed by The Blackstone Group with eight funds in which OPERS has invested $1.45 billion and Permal Capital Management in which the fund has invested $752.4 million in eight funds.

The fund matched its benchmark returns of 3.2 percent for the first half of the year ended 30 June. In the 10-year period its PE investments have returned 13.3 percent, compared with a benchmark of 10.2 percent.

Its top five funds in the first quarter were Top Tier Investments V, Baring Asia V, Co-Investment #1, Strategic Partners (OPERS Co-Invest) and Warburg Pincus Private Equity X, which contributed a combined $80.9 million.

Its bottom five performing funds of the quarter declined in value by a combined $59.9 million. The funds were Avenue Special Situations Fund VI, Bridgepoint Europe IV, Triton Fund III, AXA LBO Fund V and Riverwood Capital Partners.

Founded in 1935, to date OPERS has committed $17.1 billion to private equity in its lifetime.