NYSTRS commits $100m to MBK's fourth North Asia fund

It was one of six new investments the system made during the final quarter of last year, taking it to 217 active partnerships across 90 PE and VC firms. Active private equity commitments totalled $19 billion, while the market value of the PE portfolio was $7.7 billion.

Demand for allocations to MBK’s fund is said to have run to $7.5 billion. The largest LPs are Ontario Teachers' Pension Plan (OTPP) and Canada Pension Plan Investment Board (CPPIB). Other investors include Singapore’s Temasek Holdings and sovereign wealth fund China Investment Corporation (CIC), while New Jersey State Investment Council said in December it would commit $100 million to the vehicle.

All four of MBK’s funds target control deals in South Korea, Japan and Greater China. Fund I closed at $1.56 billion in 2006. According to New Jersey State Investment Council, as of June 2016, it had delivered a net IRR of 7.2%, a net multiple of 1.52x and a net distributions to paid in (DPI) of 0.98x.

The private equity firm raised $1.6 billion for its second fund three years later and then Fund III closed at $2.7 billion in October 2013. Fund II had an IRR of 20.8%, a multiple of 2.18x and a DPI of 1.53x as of last June, while Fund III had an IRR of 6.6%, a multiple of 1.53x, and a DPI of 0.07x. The GP said it delivered a record $2.7 billion in realizations in 2015, including completed and pending recapitalizations and exits.

NYSTRS had $105.1 billion in total assets for the year ended June 2016, including $8 billion in private equity – or 7.6%, against a target allocation of 7%. Overall alternatives exposure amounted to $9.67 billion, or 9.2%. Buyout funds accounted for 51.6% of private equity investments, with fund-of-funds on 14.2%, co-investment on 10.9% and venture capital on 6.7%.

Only 3% of NYSTRS’ private equity exposure is in Asia, excluding fund-of-funds and secondary funds. Previous commitments to dedicated Asia vehicles include: $100 million for CVC Capital Partners’ fourth pan-regional fund; $65 million for KKR Asian Fund II; $100 million for The Carlyle Group’s fourth Asia buyout fund; and $100 million for Pacific Equity Partners’ latest Australia and New Zealand vehicle.

Excluding global funds that invest in Asia, NYSTRS' regional exposure is largely focused on HarbourVest Partners' co-mingled vehicles, including HarbourVest International PEP VI - Asia Pacific Fund and HIPEP Select Asia Fund.

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• Topics
• Fundraising
• Buyout
• LPs
• GPs
• North Asia
• Asia
• New York State Teachers’ Retirement System (NYSTRS)
• MBK Partners