Virginia commits $300m to Hellman, First Reserve

The Virginia Retirement System has made $300 million in fresh commitments to Hellman & Friedman and First Reserve.

The $41.8 billion pension made a $150 million to First Reserve XII and $150 million to Hellman & Friedman Capital Partners VII, which is targeting $10 billion and has raised $6 billion.

First Reserve is targeting $12 billion for its 12th energy fund and has already collected at least $8 billion. The firm started fundraising last year. First Reserve’s fundraising for its twelfth fund has already eclipsed its 11th fund, which closed on nearly $8 billion in 2006 and is the largest energy fund raised to date. Prior to that, the firm’s 10th fund closed on $2.4 billion in 2004.

First Reserve has already made a $350 million investment in Reliant Energy last October from the 12th Fund, according to SEC filings. The acquisition of convertible preferred stock was part of a $1 billion financing package that also included $650 million term loan from GS Loan Partners.

Hellman & Friedman VII has been in the market for about six months and investors that have committed money include the San Francisco Employees’ Retirement System and the New York State Teachers’ Retirement System. About $400 million in commitments have come from the fund’s managers. Hellman & Friedman's sixth fund closed on $8 billion in 2006.

In December, the Pennsylvania State Employees’ Retirement System announced plans to delay follow-on commitments to four private equity funds, including H&F VII. It is not known whether commitments have been made but the fund delayed its first close to wait for some investors, a source told PEO in February.

As of 31 December, 2008, the Virginia Retirement System had $4.3 billion, or 10.4 percent of its capital, allocated to private equity. The pension increased its allocations to private equity and real estate to 10 percent in 2007.