Return to search

Which 3 LPs are going large on private equity?

A trio of US public pension plans all made commitments to Apollo IX, CVC VII and KKR Asian Fund III.

There’s no disputing that 2017 has been a massive year for private equity fundraising so far.

Within the last eight months the largest-ever European fund, the largest-ever Asia-focused fund and the largest-ever global private equity fund have amassed more than $50 billion in limited partner commitments between them.

CVC set a record in early summer when it held a final close on its seventh flagship buyout fund on €16 billion, the most that has ever been raised for a euro-denominated fund. A day later came word that KKR had closed its Asian Fund III, the largest-ever pan-Asia-dedicated vehicle.

Meanwhile, Apollo is gearing up to close the largest private equity fund ever, having garnered more $24.7 billion in LP commitments.

And these funds have more in common than just the “largest-ever” label: three particular LPs have chosen to back them all, committing more than $2 billion between them across all three funds, according to PEI data.

The $73.6 billion Oregon State Treasury has taken the biggest punt. The public pension fund, which has current private equity exposure of 19.3 percent and a target allocation of 17.5 percent, according to PEI data, committed $250 million each to CVC VII and KKR Asian Fund III. On 26 April, the fund’s board voted to approve a $500 million commitment to Apollo IX.

Earlier this month, PEI reported that Oregon Investment Council, part of Oregon State Treasury, is planning to hire three new investment officers within the next two years for its private equity, real estate and alternative investments asset classes as part of a new staffing strategy that will see the hiring of a total of 27 new positions in the investment division.

The private equity portfolio at Oregon Public Employees Retirement Fund, which is one of a number of funds managed by Oregon Investment Council on behalf of the Treasury, delivered a return of 6.3 percent in 2016, according to its latest annual report.

The $74.4 billion Virginia Retirement System, which has current private equity exposure of 8.7 percent and a target of 12 percent, according to PEI data, committed $270 million to Apollo IX, $224 million to CVC VII and $100 million to KKR Asian Fund III.

Virginia realised a 12.1 percent return for the 2017 fiscal year ending 30 June, bolstered by a 20.6 percent return for its private equity programme.

The $195.4 billion Florida State Board of Administration has a target allocation to private equity of 6 percent and actual exposure of 6.3 percent, according to PEI data. The pension plan committed $200 million to Apollo IX, $90 million to CVC VII, and $150 million to KKR Asian Fund III.

In June, PEI reported that SBA expects to make $1.78 billion in private equity commitments for the upcoming 2017-18 fiscal year, which started on 1 July. This consists of $1.33 billion to buyout funds, $200 million to buyout co-investments, $130 million to venture capital and $125 million to distressed, with no allotment for secondaries, according to materials for a 5 June meeting.