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Kentucky commits $40m to Keyhaven Capital

The $12.5bn pension has been expanding its investment portfolio into European-focused funds.

The $12.5 billion Kentucky Retirement System has committed up to $40 million to Keyhaven Capital, which is raising its third European mid-market focused buyout fund.

Adam Tosh, chief investment officer of the Kentucky pension, said Keyhaven is targeting around €400 million for its third fund.

We reserve the capacity until either we find the right things for us or we make sure we have that liquidity covered.

Adam Tosh

The commitment is part of the pension’s efforts to expand its investment universe into Europe. Kentucky has this year also invested in Arcano Capital, a Spanish fund of funds, and fund of funds Horsley Bridge Partners International Fund V, which closed on $1.54 billion in May. Kentucky in April committed $50 million to the Horsely Bridge fund, which invests in venture capital and small buyouts in Europe and Asia.

Kentucky has also tried to take advantage of debt and secondaries opportunities this year, investing $50 million in Commerce Street Income Partners Fund II, a distressed debt fund, and $26 million to the Camelot Acquisitions: Secondary Opportunities fund, which is targeting $250 million to $300 million.

Kentucky probably will not make any more commitments to private equity funds the rest of 2009. The pension does not have a specific dollar target for the amount it would like to commit to private equity, Tosh said. Kentucky has an allocation target of 12 percent, which includes private equity and real estate.

“We reserve the capacity until either we find the right things for us or we make sure we have that liquidity covered,” Tosh told PEO.