Louisiana Teachers’ bets on healthcare, distressed

The pension, with $12bn in assets, has committed $80m to Enhanced Equity and American Securities in its latest private equity commitments.

The $12 billion Louisiana Teachers’ Retirement System has committed $80 million to American Securities and Enhanced Equity as part of its private equity allocation for fiscal 2010, which will come in well below its $1 billion target.

Louisiana Teachers’ anticipates committing a total of about $600 million to private equity in fiscal 2010, which ends 30 June.

The pension has seen fewer opportunities for investment, according to Philip Griffith, Louisiana Teachers’ chief investment officer. Also, funds expected to raise money dropped out of the market, he said.

“Funds have been extending their current funds, not fund raising,” Griffith said.

The pension committed $50 million to American Securities Opportunities Fund II, which is raising an undisclosed amount to make investments in distressed companies. American Securities first distressed fund closed on $300 million in 2006. The firm also has a family of five private equity funds, its latest a $2.3 billion vehicle for investments in healthcare, consumer and industrial sectors.

Louisiana Teachers’ also gave $30 million to Enhanced Equity Fund II, targeting $350 million for healthcare investments. Fund II has so far collected $106 million. Enhanced Equity invests $5 million to $25 million in healthcare and information and business services in strategies including growth capital, recapitalisations and buyouts. Enhanced Equity’s first fund collected $225 million.

Louisiana, which has invested in private equity since the late 1980s, has a target allocation of 10 percent and an actual allocation of 12.5 percent. The pension has a target allocation of 9 percent to real assets, which includes real estate and infrastructure. Louisiana Teachers’ has yet to make an infrastructure investment and has not made a real estate investment this year.