The USD 16 billion public pension fund’s investment board has approved a plan to increase the target allocation to private equity from 14% to 16% of total assets and to commit a total of approximately USD 350 million to private equity funds in 2012.
SFERS has made a number of new commitments to private equity funds in the last few months, including a USD 30 million commitment to Canaan Equity IX, which closed in January 2012. In Q4 2011, the pension fund felt that in needed greater exposure to Asia, and subsequently made a USD 20 million commitment to Chinese mid-market buyout fund- Hony Capital Fund V, which also held a final close earlier this month.
SFERS historically made commitments to a wide variety of funds, predominantly buyout and venture, but also funds of funds, distressed debt, secondaries and mezzanine funds. Going forward, the retirement system is likely to invest in funds with an exposure to software services, business services and healthcare industries, as well as Europe-focused distressed private equity funds.
SFERS is one of 3,750 LPs currently tracked by Preqin and with approximately USD 2 billion currently allocated to private equity; it has the fifth largest allocation to the asset class of all of the 27 California-based public pension funds currently tracked on Investor Intelligence.