The New York State Common Retirement Fund (NYSCRF) made a capital commitment of $64.8 million in total to two Chinese private equity funds in December 2018, according to a monthly transaction report.
It allocated $39.85 million to Boyu Capital’s fourth USD-denominated fund, Boyu Capital Fund IV. According to Reuters, the PE firm is seeking at least $3 billion for the fund that would be its largest to date. The fund size has not been disclosed by the PE firm.
Boyu’s last USD fund raised about $2.1 billion in 2016 and saw a 37.5 per cent gross internal rate of return as of the end of June 2018, said the Reuters report. The Hong Kong-based firm’s first two USD funds, which raised about $1 billion and $1.6 billion, are fully invested and had net IRRs of about 35 per cent and 40 per cent.
Meanwhile, NYSCRF also committed $25 million to CDH Investments’ sixth China Fund, CDH Fund VI. DEALSTREETASIA had earlier reported that the Chinese firm mopped up over $1 billion in commitments for the fund, which aims to make investments in consumer, healthcare, financial services and other growth sectors.
CDH Fund VI has a hard cap of $2.5 billion and is expected to make a final close by the second quarter of this year. The fund’s predecessor, CDH Fund V, was closed at $2.5 billion in 2014, with backing from LPs including Texas County and District Retirement System.
NYSCRF is an existing backer of both firms. The pension fund also made a $500-million commitment to Blackstone’s latest commingled real estate fund, Blackstone Real Estate Partners IX.
On top of that, it also committed $300 million to KKR’s Global Impact Fund, which will invest across five impact verticles aligned with the UN’s Sustainable Development Goals. The recently-formed unit by the private equity major will seek investments in small and medium-sized companies focusing on areas such as renewable energy, education and environmental management, according to a Reuters report.
NYSCRF also put in $150 million in TSSP Opportunities Partners IV, which is private equity major TPG’s latest opportunistic credit fund, with an aim to raise $3 billion to invest in distressed assets.
Pension funds’ growing Asia allocations
Western pension funds are increasingly looking to hedge their capital with Asia-focused vehicles.
In January, the Los Angeles City Employees’ Retirement System committed $25 million to Hong Kong-based Baring Private Equity Asia’s seventh Asia-focused vehicle. The $5.5-billion Baring Asia Fund VIII has also received allocations from other US pension funds, including Texas Employees Retirement System ($15 million), Los Angeles Fire & Police Pension System ($25 million) and Rhode Island State Investment Commission.
Recently, San Francisco Employee’s Retirement System committed $40 million to China-based venture capital firm Lilly Asia Ventures’ fifth biosciences fund. The same fund is also backed by Los Angeles County Employee’s Retirement Association, which committed $100 million this January.
Another Chinese VC firm, ClearVue Capital, also recently received $200 million worth of commitments for its third fund, ClearVue Partners III, from the $75-billion Oregon Public Employees Retirement Fund. Shanghai-based ClearVue is currently on the road to raise $600 million for its latest fund.