US-based public pension funds look to be actively making sizeable commitments to a range of private equity fund types in Q4, with many investors looking set to continue to make fund commitments into 2012.
The latest growth vehicle raised by TPG, TPG Star II, has received commitments from a number of US-based public pension funds. These include USD 30 million from Los Angeles City Employees’ Retirement System (LACERS), USD 75 million from Oregon State Treasury, as well as commitments from Teachers’ Retirement System of Louisiana and Washington State Investment Board. In addition to this, New York State Common Retirement Fund (NYSCRF) has recently committed USD 375 to two private equity buyout vehicles, and Arizona Public Safety Personnel Retirement System (PSPRS) has committed USD 50 million to a US-based buyout fund. Louisiana State Employees' Retirement System (LASERS) has also recently made fund commitments, totalling USD 100 million, to European private equity funds, one focused on distressed debt, and the other focused on special situations.
Preqin’s Investor Intelligence database currently holds information on 285 North America-based public pension funds that are active investors in private equity. Of these, around 31% typically make commitments of over USD 20 million per private equity fund, and 92% will commit over USD 5 million. Over half (54%) of US-based public pension funds have made commitments to, or are willing to make commitments to, first-time funds, with just 10% of these committing only to first-time funds in the form of spin-offs. Over a quarter of US-based public pension funds currently have an unfilled target commitment, and just 5% are unlikely to consider making new fund commitments in the next 24 months. Venture and buyout fund types appear to be the most popular amongst these pension funds, with 65% and 62% respectively investing in these fund types.