Indiana pension commits $145m to three funds

As part of a renewed emphasis on alternative investments, the state's retirement fund has made commitments to venture, energy, and distressed funds.

The Indiana Public Employees Retirement Fund (Indiana PERF) committed $145 million (€94.54) to three very different private equity funds last week, affirming its pledge to focus an increasing amount of its $17.2 billion fund towards alternative investments.

“The basic concept here is managing risk through diversification,” said Indiana PERF spokesman Jeff Huston. “We’re just trying to be prudent with the types of commitments we make.”

Indiana PERF, which oversees the pension investments of more than 230,000 state employees, committed $75 million to Horsley Bridge IX, a fund of funds specializing in venture and growth investments; $40 million to

Natural Gas Partners IX, an energy start-up fund; and $ 30 million to York Opportunity Fund, a distressed investment fund, according to the Board of Trustee’s December minutes.  

The commitments come amid Indiana PERF’s renewed drive to devote more attention towards alternative investments, and towards private equity in particular. Two years ago, the retirement system pledged to triple its allocation to alternatives to 15 percent, and is currently planning to commit $500 million annually to private equity until 2012, according to PEO sister data service Private Equity Connect and the Board’s press releases.  

The retirement fund also recently created the Indiana Investment Fund, which pursues private equity investments located within the state.

As of last year, however, Indiana PERF allocated just $1.2 billion to private equity, constituting only 7 percent of its total assets at the time.

This is the third re-up Indiana PERF has made with Horsley Bridge, a San Francisco fund of funds firm. Horsley Bridge IX is seeking a $1.75 billion close and will target the fund on tech venture and growth opportunities, according to the board’s minutes.   

In contrast, the $40 million commitment to NGP and $30 million commitment to York represent new relationships for the pension fund.  

Natural Gas Partners, a Texas-based energy giant, is seeking $3 billion for its ninth North American oil and gas fund, while York is raising $750 million to target mid-market distress opportunities.