Oregon bets on TPG growth fund

The pension committed $75m to TPG’s second growth fund that will split investments between the US and international opportunities, with an emphasis on China and southeast Asia.

The Oregon Investment Council has committed $75 million to TPG Growth Fund II, which targets small and mid-market growth buyouts.

The fund, which is targeting $2 billion, will split its investments between the US and international opportunities, with an emphasis on China and Southeast Asia, according to documents obtained from the OIC. The firm will make 25 to 30 transactions of less than $100 million over the course of the fund’s six-year commitment period, focusing on late-stage venture capital opportunities, minority growth investments, small buyouts, corporate partnerships and start-ups.

TPG will make a 1.5 percent capital commitment to Fund II upon its final close.

In May, the Washington State Investment Board committed $200 million to the fund. The firm has not engaged a placement agent.

The Oregon Public Employees’ Retirement Fund, which the OIC manages, committed $100 million to TPG’s prior small-cap focused fund, called the Small Transactions, Allied-Resources fund, closed in 2007. TPG launched STAR to target the smaller, high-growth investments the firm had focused on its earlier private equity funds, according to state documents. The fund was generating a 10.6 percent internal rate of return and a net total value multiple of 1.16x as of 31 December, 2010, according to Oregon pension documents.

The $75 billion pension system decreased its allocation from STAR to Fund II because it has exceeded its targeted 12 percent to 20 percent allocation to private equity, Oregon spokesman James Sinks said. Current private equity commitments account for 22 percent of Oregon’s assets.