Institution: Tennessee Consolidated Retirement System
Headquarters: Nashville, United States
Allocation to Alternatives: 14.9%
Tennessee Consolidated Retirement System has agreed to commit $345 million to five venture capital and private equity funds, according to a representative within the organization.
Commitments of $100 million to New Enterprise Associates 17 and $150 million to Great Hill Equity Partners VII were made in May 2019. Commitments of $40 million to Drive Capital Overdrive Fund I, $30 million to Drive Capital Fund III, and an additional $25 million to General Catalyst Group IX were made in June 2019. NEA, Drive Capital, and General Catalyst Partners are all venture capital firms, while Great Hill Equity Partners is a growth equity focused investment firm. TCRS has made previous commitments to all fund managers. Several of these prior commitments are illustrated below.
TCRS is aiming to increase its private equity allocation. According to its board minutes, the public pension is looking for both “venture capital firms that can deliver great net returns,” and “attractive relationships that would expand the growth equity exposure.” TCRS faces challenges in constructing a private equity investment portfolio that is not overly-reliant on software industry exposure. Many venture capital managers within the pension’s current portfolio do invest heavily in that sector, notes a representative within the organization.
The $50.66 billion US public pension has a 7.0 percent target allocation to private equity which currently stands at 6.1 percent.
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