The California Public Employees Retirement System is considering making a $175 million commitment to Wellspring Capital Partners V, which is targeting $1.3 billion for US mid-market investments.
Wellspring is expected to hold a final close on its fifth buyout fund this month, according to a person with knowledge of the fundraising and documents from the Connecticut Investment Advisory Council. As of 12 August, the firm had collected at least $900 million.
Wellspring, founded in 1995 by Greg Feldman and the late Martin Davis, will charge a 2 percent management fee on commitments up to $1 billion, and 1.25 percent for commitments over $1 billion for the first five years of the fund’s term. After five years, the fee will drop to 1 percent until the investment period ends, and will then equal 1 percent per annum of net invested capital.
The firm will give 100 percent of the transaction fee to LPs to pay down the management fee.
Fund V, if it hits its target, would be Wellspring’s largest. The firm expects to target companies ranging in value from $150 million to $750 million and more, according to Connecticut pension documents.
Last week, CalPERS ended its partnership with Pacific Corporate Group as part of its strategic review of private equity programme. The $218.9 billion pension enlisted Capital Dynamics to manage CalPERS' $480m Clean Energy & Technology Fund.
In June, the pension committed $250 million to debt-focused Blackstone affiliate GSO Capital Partners, which closed on more than $3.25 billion in commitments in July.