Arizona PSPRS commits $90m to StepStone Asia fund

The pension fund approved the investment at a meeting last week, although the disclosure gave no further information on the overall size and nature of the vehicle. StepStone Global is one of Arizona PSPRS' private equity advisors.

As of June 2013, the pension fund had $8.1 billion in assets under management. Speaking to AVCJ earlier this year, Shan Chen, portfolio manager at Arizona PSPRS, said $1.1 billion was invested in private equity globally and the target allocation had risen from 11% to around 13%.

Arizona PSPRS made its first commitment to Baring Private Equity Asia's fifth fund, which closed in 2010. Since then it has allocated about $150 million to Asian private equity, including $20 million for Baring Asia's sixth fund, which closed this year at $3.98 billion, and $25 million for KKR Asian Fund II in 2012.

"From a risk control point of view, the stability of the team and its downside protection give us a lot of comfort, because the problem with many Asian managers is that the partners are moving around very often," Chen said. "We don't really expect that they [Baring] will deliver outsize returns in the latest fund. But for a US-based LP investing in Asia, this is a pretty good choice. That's the same scenario for us to invest in KKR."

Arizona PSPRS has also started backing single country funds, with a particular focus on China. Healthcare specialist Vivo Capital, which invests in the US and China, and Trustbridge Partners are among the GPs that have received capital.

Around 70% of the Asia allocation has been earmarked for China, with the rest spread across India and Southeast Asia. Commits are in the region of $20-40 million per fund. The pension fund's target return for its entire private equity portfolio is a 2-2.5x money multiple and a 20-25% IRR.

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• Topics
• Fundraising
• LPs
• Greater China
• LPs
• Fundraising
• Stepstone
• USA
• Arizona Public Safety Personnel Retirement System