The 10 largest H1 2017 fund closes (and the LPs in them)

It was a record-breaking first half - but which investors were behind it?

More capital was raised for closed-ended private equity funds in the first half of 2017 than in any first half since Private Equity International began tracking fund close data in 2008.

Just under 370 funds raised $264 billion between them, compared with $243 billion for the first half of 2016 and $205 billion for H1 2015.

The first half of the year also continued the trend of more capital concentrating in fewer hands – with the average fund for the period now a staggering $716 million.

Nowhere is this more apparent than among the top 10 fundraises of the first half. These 10 funds raised just over 35 percent of all capital raised in the period – just a shade under $95 billion.

And according to PEI data, several limited partners made hefty commitments to more than one of them.

Perhaps unsurprisingly, the $323 billion California Public Employees’ Retirement System, whose private equity programme posted a 13.9 percent return for the 12 months ending 30 June, committed the most money in the first half, pledging a combined $1.59 billion to: CVC Fund VII ($500 million), which, at €16 billion, is the largest euro-denominated private equity fund ever raised; Silver Lake Partners V ($500 million), which closed significantly above its $12.5 billion target at $15 billion in April; Clayton. Dubilier & Rice X ($150 million), which closed on its $9.35 billion hard-cap having garnered more than $20 billion in demand; and Permira VI ($440 million), which closed on its €7.5 billion target in January.

Industry giant KKR closed two heavy-hitters in the first half of the year. The $13.9 billion KKR Americas Fund XII drew a $150 million commitment from the $85.3 billion Minnesota State Board of Investment, which also committed to the firm’s Asia fund, Silver Lake, and Permira. The fund also attracted commitments from, among others, the Public Employee Retirement System of Idaho, also an investor in the Silver Lake fund; a $200 million ticket from the Michigan Department of Treasury, a backer of the $4.6 billion Crescent Mezzanine Partners Fund VII; and Japan Bank for International Cooperation.

The $9.3 billion KKR Asian Fund III, the largest-ever pan-Asia focused private equity fund, drew a $200 million commitment from the New York State Teachers’ Retirement System, which also committed to CVC and Silver Lake. The KKR fund also drew $30 million from Ohio Police & Fire Pension Fund and $150 million commitments from both Florida State Board of Administration and Minnesota State Board of Investment, among others.

Florida State Board of Administration also committed $90 million to CVC VII, $140 million to Silver Lake V, and $150 million to Crescent Mezzanine Partners Fund VII.

The $116.5 billion Washington State Investment Board invested $1.25 billion across the two KKR funds. It also made an undisclosed commitment to Permira VI.

Both the $192 billion New York State Common Retirement Fund and the $72.4 billion Virginia Retirement System chose to make commitments to CVC VII and KKR Asian Fund III, respectively committing $350 million and $224 million to the former and $275 million and $100 million with the latter. New York also committed $600 million to the KKR Americas fund.

Meanwhile $74 billion Oregon State Treasury committed $1.25 billion across four funds: CVC Capital VII, KKR Americas Fund XII, KKR Asian Fund III and Permira VI.

Other investors in Permira VI include Pennsylvania State Employees’ Retirement System ($100 million), which also invested with CVC ($94 million), Silver Lake ($100 million), and Platinum Equity ($100 million); University of Michigan ($28 million), also an investor with CVC ($35 million) and Silver Lake ($38 million); and Teacher Retirement System of Texas, which committed $444.38 million.

The $326.5 bn Canada Pension Plan Investment Board, which delivered a portfolio-wide five-year annualised nominal return of 12.1 percent to 30 June, invested close to C$1 billion with KKR Americas Fund XII (C$300 million), Clayton, Dubilier & Rice X (C$225 million) and Permira VI (C$600 million).

Other investors in CD&R’s latest fund include Los Angeles Water & Power Employees Retirement Plan ($65 million) and Oklahoma State Regents for Higher Education ($7 million), which both also committed to Silver Lake V.

The $6.5 billion Platinum Equity Capital Partners IV received commitments from, among others, Los Angeles Fire & Police Pension System – also an investor in Silver Lake V – Finnish Local Government Pensions Institution (KEVA) – also an investor in Crescent Mezzanine Partners Fund VII – and Teachers’ Retirement System of Louisiana, which also made commitments to CVC and Silver Lake.

Investors in Alcentra European Direct Lending Fund II, which closed on €4.3 billion in March – more than double its initial target of €2 billion – include New Hampshire Retirement System ($50 million), Orange County Employees’ Retirement System ($110 million), Strathclyde Pension Fund (£150 million), and Oklahoma Tobacco Settlement Endowment Trust ($25 million).

Cerberus Institutional Partners VI, a hybrid equity and credit fund which closed on its $4 billion hard-cap in April, received commitments from more than 150 investors across the globe. These include the Louisiana State Employees Retirement System ($125 million), Pennsylvania Public School Employees’ Retirement System ($200 million), also an investor with Platinum Equity, and the University of Louisville Foundation ($4 million).