The Tennessee Consolidated Retirement System, which announced its first-ever private equity investments in August, is considering making an investment in a secondaries fund.
The public pension wants “to just get some capital to work relatively quickly and in a broadly diversified way and to diversify our vintage year exposure more quickly”, Lamar Villere, the pension's head of private equity, told PEO.
Tennessee is in discussions with numerous secondaries firms, though Villere declined to name them.
Villere, who joined Tennessee in February from the Teachers’ Retirement System of Illinois, wanted at first for the pension to directly purchase LP stakes on the secondary market but discovered sellers wanted decisions made too quickly for the pension, he said.
“We’re a new programme, and we don’t have the organisation for us to just sort of make a decision and go,” Villere said, explaining that some secondaries sellers wanted decisions made in two weeks.
Tennessee aims to invest about $800 million in private equity over the next five to six years. The pension’s investment advisor is Strategic Investment Solutions.
The pension has been building up its private equity programme since receiving state government approval last year to invest up to 3 percent in the asset class. The pension’s target allocation to private equity is 3 percent, with a hard cap of 5 percent.
In August, Tennessee revealed it made its first three private equity commitments: $75 million to Hellman & Friedman; $50 million to TA Associates and $25 million to Khosla Ventures.