CalPERS commits nearly $1bn to TPG

The California pension has also reported commitments to Advent, Audax and Huntsman Gay.

The $244 billion (€158 billlion) California Public Employees Retirement System has reported $1.76 billion in commitments across four private equity funds, three of which signal the pension’s belief that the middle market should be “less impacted by current credit and financial problems”, according to an investment board agenda. 

CalPERS, the largest public pension in the US, has invested $950 million in TPG’s sixth buyout fund, which is targeting $18 billion. It also has committed $500 million to Advent International's sixth fund, which closed last month on $10 billion, and $125 million to Audax Private Equity Fund III, which closed last year on $1 billion.

The pension has also committed $180 million to Huntsman Gay Capital Partners, a Bain Capital spin-out that will focus its debut fund on middle market leveraged buyouts.

Utah-based Huntsman Gay was formed last year by former Bain Capital managing director Robert Gay and chemical industrialist Jon Huntsman.

TPG Partners VI will focus on leveraged buyouts and special situations in North America and Europe and to a limited extend in Asia. According to the agenda, the Fort Worth-based firm will “target companies which are off the beaten path and transformational in nature” and that require $250 million to $1 billion in equity. Target businesses must meet a minimum valuation requirement of $300 million.

Advent International’s sixth US- and European-focussed fund will invest primarily in middle market companies across industries and geographies. 

Bain Capital spin-out Audax Group’s third private equity fund will target lower middle market businesses with enterprise values between $25 million and $500 million. The fund will pursue a buy-and-build investment strategy.

CalPERS has invested in several earlier TPG and Advent funds, and in 2004 committed $70 million to Audax Private Equity II, according to sister data source PE Connect.
Although just reported publicly in CalPERS’ Investment Committee’s May meeting agenda, the commitments were completed under delegated authority over an unspecified time frame, meaning many of the commitments may have taken place months ago.

CalPERS’ delegated authority policy allows its investment officers to commit capital up to a certain amount without requiring prior board consent or immediate public disclosure.

The pension maintains a 10 percent allocation to private equity.