SFERS okays $25m investment in HK-based PAG’s special situations fund

The Golden Gate bridge in San Francisco. Photo: Jakub Gorajek/unsplash

Hong Kong-based alternative investment firm PAG has secured a $25-million investment from US pension fund San Francisco Employees’ Retirement System (SFERS) for its latest special situations fund.

DealStreetAsia earlier reported that PAG Special Situations Fund III seeks to raise at least $1 billion to make realty investments in markets including Australia, New Zealand, China, Japan, Southeast Asia, and South Korea.

The firm had closed its second special situations fund at $1.4 billion in 2014.

PAG Special Situations Fund III will target an annual net return of 15 per cent. It has an investment period of three years and will begin liquidation by the sixth year. Its predecessor, PAG Special Situations Fund II, had generated a net internal rate of return (IRR) of 17.6 per cent.

According to a SFERS board meeting report, the $25-million investment was closed last month and classified as a distressed/special situations investment within its private credit portfolio.

The investment is also SFERS’s second commitment to PAG Special Situations Fund III. In July, the US pension fund approved a $50-million investment in the fund. Besides SFERS, the vehicle has also received a $75-million commitment from Texas Permanent School Fund.

The pension fund had also committed $50 million to the PE firm’s third Asia-focused buyout fund that was closed last November 2018 at $6 billion, exceeding its initial target of $4.5 billion.

The commitment to PAG’s third special situations fund marks SFERS’s latest contribution into an Asia-focused fund. It also committed $75 million to Hong Kong-based alternative asset management firm SSG Capital Management’s latest closed-end fund, SSG Secured Lending Opportunities III.

PAG is an Asia-focused investor that manages $30 billion in capital across private equity, real estate, and absolute return strategies. It operates in multiple markets including Australia, China, India, Japan, South Korea, and Southeast Asia.

SFERS, meanwhile, disclosed that its returns for the year ending June was at 2.41 per cent, topping its median peer return of 1.34 per cent. Its Private Equity portfolio recorded a gain of 6.04 per cent, boosted by its tilt toward the US, China, technology, healthcare, and its strong manager selection.

In August, the pension fund’s investment gained 3.86 per cent, with returns led by its public and private equity portfolios, which posted 6.20 per cent and 7.38 per cent returns, respectively.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.