The Sacramento County Employees’ Retirement System has increased its private equity commitment target for 2014 from $220 million to $265 million, according to documents from the pension’s March board meeting.
Sacramento upped its commitment target to the asset class due to the growing value of the retirement system’s overall assets and higher forecasted values in the coming years. The pension has $7.57 billion of assets as of 31 December 2013, which it expects to grow to about $8.1 billion by 31 December 2014.
For 2014, Sacramento is aiming to commit to nine private equity funds, investing about $35 million to each vehicle. The pension expects to commit to three buyout funds, two distressed funds, two venture capital funds and two funds outside the US. The system has a range of between seven to 11 funds and a range of between $20 million and $40 million per vehicle.
In 2013, Sacramento targeted commitments to more than eight funds, or within the range of seven to 10 funds. However, since April 2013 the pension has actually committed about $185 million to six funds, including a $35 million commitment to RRJ Capital Master Fund II, a southeast Asia-focused buyout and special situations fund, and €14 million to HIG Europe Capital Partners II, which closed last year on €825 million, above its €750 million hard-cap.
Sacramento expects to reach its 10 percent target allocation to private equity by 2019. The system increased its target from 5 percent to 10 percent during the fourth quarter 2011. Sacramento’s actual allocation stands at 3 percent and is expected to increase to 4.8 percent by December 2014. The bulk of the pension’s private equity portfolio is allocated to US buyout funds.
Sacramento is also a limited partner in a number of fund of funds, including funds managed by Abbott Capital, Goldman Sachs and HarbourVest Partners. The pension committed $75 million each to Abbott Capital Private Equity Fund VI and Goldman Sachs Private Equity Partners X and $50 million to HarbourVest Partners VIII. Sacramento is also a limited partner in HarbourVest International Private Equity Partners VI.
The pension expects to commit to two additional private equity funds in the upcoming weeks, according to the documents.