California’s biggest public pension system commits $1bn to Blackstone fund

Jun 10, 2020 | News | 0 comments

California’s biggest public pension system firmed up its relationship with Blackstone Group over the first quarter with a 10-figure commitment while also setting up two new $1bn separate accounts with other firms to boost its asset allocation to private equity and credit investments.

The California Public Employees’ Retirement System committed $1bn to Blackstone Core Equity Partners II LP, a long-hold private equity fund that raised some $5bn in late March, according to Jon Gray, the firm’s president and chief operating officer. He described the fundraising during Blackstone’s first quarter earnings call with analysts on 23 April.

Previously, Calpers had invested at least $4.8bn across nine Blackstone funds, starting in 2010 and extending to 2018. The latest commitment is the first to a Blackstone vehicle since then.

Blackstone’s long-hold funds have decadeslong investment periods and a lower risk profile that its more typical funds, which have an investment period of four to six years, people familiar with the situation said. The firm’s debut long-hold fund began raising capital in 2016 and collected $4.8bn. By the end of last year, it generated net returns of 20%, according to the firm.

In 2019, Calpers decided to use more separately managed accounts as it sought to reach a goal of investing up to $10bn a year in private equity. The $396.09bn pension system has trailed its 8% allocation target for the asset class.

Calpers also committed $1bn each to two separately managed accounts targeting investments in private credit funds. One of the accounts is with Oaktree Capital Management’s Oaktree Latigo Investment Fund LP. The pension system previously invested with Oaktree through a $200m commitment to its Oaktree Opportunities Fund VIIIb LP.

In the other separately managed account, Calpers committed $1bn to Oak Hill Advisors’ OHA Black Bear Fund LP. The pension system previously committed $375m to the firm across two funds.

In all, Calpers committed $3.9bn to private equity investments in the first quarter, including $400m in January to Insight Partners’ 11th flagship fund; $200m to CVC Capital Partners’ fifth Asia fund, which raised $4.5bn and closed in April; and $300m to Ardian’s eighth and largest secondary fund. The Paris-based firm earlier this month said it collected about $19bn for the new secondaries platform, including co-investment funds.

Source: penews

Can’t stop reading? Read more