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Virginia pension re-ups with $75m to Madison Dearborn

The $58bn Virginia Retirement System continues its alternatives push with an investment in the $10bn buyout fund.

The Virginia Retirement System has committed $75 million (€48 million) to Madison Dearborn Partners’ latest North American-focussed buyout fund.

The $58 billion pension, which manages the combined retirement assets of the state’s teachers and other public employees, re-upped with Madison Dearborn after also investing in the Chicago firm’s fourth fund.

Madison Dearborn VI is a $10 billion buyout fund targeting large, control transactions in North America, according to documents from the Washington State Investment Board, which has committed $150 million to the fund. The fund will focus on large buyouts in basic industries including the communications, consumer, energy, financial services, real estate and healthcare sectors. The fund will also pursue select growth equity investments and some European buyout deals.

Virginia Retirement’s commitment represents the pension’s latest stride towards meeting its recently increased private equity allocation. Following a 32 percent return on its private equity portfolio last year, Virginia Retirement expanded its allocation to private equity and real estate from 7 percent to 10 percent.

Last month, Virginia Retirement unveiled a wave of fresh commitments, including $66 million to Summit Partners’ debut European fund, $70 million to Angelo Gordon’s sixth distressed investment fund and $300 million to the second co-investment fund raised by Adams Street, a fund of funds.

Summit Partners’ European fund closed on $1 billion last month, while Angelo Gordon’s fund closed two months ago on its $2 billion hard cap.