The investment council of the $75-billion Oregon Public Employees Retirement Fund (OPERF) is looking to increase its private equity allocation to Asia in the long-term at the expense of developed markets, it said in a board meeting held last month.
“However, for capacity reasons, OPERF’s allocation can only move as fast as the broader industry develops in emerging market,” it added.
In the medium-term, the fund’s allocation for Asia stands between 10 per cent and 15 per cent. OPERF will continue to pursue a buyout-heavy strategy, for which it has a 60-85 per cent target, owing to the size of its private equity portfolio. For special situations and VC/growth equity, the target is 5-15 per cent.
“Over time, the 5-15 per cent target to VC & Growth will continue to become more biased to growth equity at the expense of VC as OPERF has low access and investment capacity in VC. The special situations allocation has evolved over time into an allocation to corporate distressed debt. As a result, this segment of the portfolio will be more opportunistic and less of a strategic allocation going forward,” it said.
In 2018, it had committed $3 billion to 12 private equity funds. For buyout funds, the total commitment was $2.4 billion, while for VC/growth funds, its commitments totalled $584 million. The year saw 11 per cent of the total commitments going to Asia-focused funds.
Its 2018 allocations included a $200 million commitment to Chinese private equity firm ClearVue Capital’s third fund, ClearVue Partners III.
DEALSTREETASIA had reported that Shanghai-based ClearVue Capital is currently on the road to raise $600 million for ClearVue Partners III, almost twice as much as its second fund, which was closed at a hard cap of $362 million in 2017.
The pension fund is also an LP in China and US-based VC firm GGV Capital. In 2018, it committed $100 million to the firm’s main funds – GGV Capital VII and VII Plus – as well as the $460-million GGV Discovery II focused on seed and early-stage opportunities.
The funds, inclusive of a $60-million GGV Capital VII Entrepreneurs Fund which consists largely of company founders as LPs, were closed last October, raising a total of $1.88 billion. Another US pension fund – California State Teachers’ Retirement System (CalSTRS) is also a backer of GGV Capital’s latest funds.
US pension funds are starting to turn their attention and capital to Asia-focused vehicles. Recently, New York State Teachers’ Retirement System committed $175 million to two Asian PE funds – Korean-based Hahn & Company and India-based ChrysCapital.
Last December, the New York State Common Retirement Fund (NYSCRF) made a capital commitment of $64.8 million in total to two Chinese private equity funds – $38.85 million to Boyu Capital’s fourth USD fund and $25 million to CDH Investments’ sixth China fund.
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 same fund is also backed by Texas Employees Retirement System ($15 million), Los Angeles Fire & Police Pension System ($25 million) and Rhode Island State Investment Commission.