PSERS, Louisiana Teachers commit to CVC's fourth Asia fund

The PSERS Finance Committee resolved earlier this week to allocate $100 million to CVC Capital Partners Asia Pacific Fund IV, which is targeting $3 billion overall with a hard cap of $3.3 billion. PSERS previously committed $300 million to the private equity firm's third regional vehicle.

The pension system's investment portfolio was worth $48.9 billion as of September 2013. Of this, 21.1% - or $10.4 billion - was allocated to private markets, including $8.2 billion in private equity, $1.3 billion in private debt and $832 million in venture capital. A further $7 billion was in real estate and $5.2 billion in hedge funds.

Existing commitments to Asia-focused GPs include Bain Capital Asia Fund II, Morgan Stanley Private Equity Asia IV, Baring Asia Private Equity Fund III, IV and V, Headland Private Equity Fund 6, Navis Asia Fund V and Orchid Asia V.

TRSL will invest $75 million in CVC's fourth Asia fund - its first commitment to an Asia-focused private equity vehicle this year. The pension system had $15.7 billion under management as of October 2013, including $3.9 billion in alternative assets and real estate. The private equity allocation was $1.6 billion, below the 13% target.

CVC's new fund will pursue deals of $60-300 million in Greater China, Japan, South Korea and Southeast Asia. The target return is 20-30% gross IRR and a gross multiple of 2-3x.

The private equity firm's first Asia fund, a 200 vintage vehicle that closed at $750 million, delivered a net IRR of 31.4% and a net multiple of 2.2x. Fund II was problematic, receiving commitments of $1.9 billion in 2005 but the net IRR stands at -9.6% and the net multiple at 0.6x.

CVC closed Fund III at $4.2 billion in 2008 and it has so far delivered a net IRR of 16.1% and a net multiple of 1.5x.

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• Topics
• Fundraising
• LPs
• GPs
• Buyout
• Pennsylvania Public School Employees’ Retirement System (PSERS)
• LPs
• Asia
• CVC Capital Partners
• GPs