Side Letter: Alaska’s Asia aspirations, TPG’s $14bn, more adventurous LPs

Alaska Permanent Fund eyes more Asia exposure, TPG's double haul and the LPs from QIC and U Michigan you need to know. Here’s today's brief, for our valued subscribers only.

Just happened

Alaska looks west

Raising a fund in Asia? Book a flight to Alaska. The $65 billion Alaska Permanent Fund’s private equity portfolio is around 5 percent allocated to the region, which senior portfolio manager Yup Kim (pictured) tells Private Equity International is “sizeably underweight” compared with its peers. APFC will raise its exposure by committing to pan-Asian mega-funds, which it shies away from in developed markets. It will also anchor vehicles. The fund is particularly bullish on Chinese healthcare and Indonesia.

TPG’s double hitter

The firm has amassed almost $14 billion for its eighth flagship fund and healthcare sidecar. The firm is on the cusp of holding final closes for the vehicle, pending a few LPs ironing out legal and regulatory matters. TPG is not the only firm with a major focus on healthcare; global PE deal activity in the sector hit a 12-year high of $63.1 billion in 2018, according to Bain & Co.

Adventurous LPs: builders and strategists

Next up in our celebration of private equity’s most adventurous LPs: the architecture undergrad who drew up the blueprints for an A$85 billion ($59 billion; €53 billion) Aussie superannuation fund’s private equity portfolio, and the CIO with a “thought-leader mindset” who has grown a US endowment from 17th largest to ninth.

Essentials

Apollo versus Athene. Apollo Global Management is facing a lawsuit alleging “improper looting” of its affiliate insurance company Athene. The suit, brought in New York by the Central Laborers’ Pension Fund, a shareholder of the listed Athene, alleges the company overpaid “hundreds of millions of dollars each year”. The pension cites an FT investigation (paywall) that reported Apollo charged Athene “at least twice as much as an unaffiliated investment manager” to manage its investment portfolio. Athene declined to comment while a spokesman for Apollo told PEI in an emailed statement: “We believe the claims have no merit – both legally and factually – and we intend to defend the case vigorously.”

Vive le French PE. Private equity remains France’s best performing asset class and delivered 11.2 percent over the past 15 years, according to France Invest and EY’s annual study. By comparison, the CAC 40 stock market index has returned 5.9 percent over a 15-year period, while real estate and hedge funds delivered 7.7 percent and 3.8 percent respectively. Bravo, bravo.

Dig deeper

LA capital stream. Los Angeles Water & Power Employees Retirement Plan has approved $200 million in commitments, split evenly between Searchlight Capital III and Providence Strategic Growth IV. Here are some recent fund commitments from the $12.6 billion US pension. For more information on LADWP, as well as more than 6,700 other institutions, check out the PEI database.

He said it

“I’d rather go back to the days of private equity investors just being private equity investors”

Washington State Investment Board’s outgoing CIO Gary Bruebaker tells PEI his thoughts on GPs launching multiple strategies.


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Today’s letter was prepared by Isobel MarkhamAdam LeAlex Lynn and Preeti Singh.


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