Texas Permanent School Fund, a $22-billion pension fund managed by Texas Education Agency, has committed a total of $145 million to the latest vehicles of private equity giant KKR and Hong Kong-based PE firm PAG.
In the second quarter, the Texas fund committed $70 million to KKR Asian Fund IV, which has already raised approximately $11 billion to become the largest pan-Asia PE fund in the world. KKR is reportedly seeking to raise $12.5 billion for the said fund.
The KKR fund recently secured a $300 million capital commitment from the New York State Common Retirement Fund. The $11 billion raised so far through July means that it has already surpassed the record $10.6 billion raised by Hillhouse Capital Group for Asia in 2018.
In June, the US fund also committed $75 million to PAG Loan Fund IV, the fourth direct lending fund of PAG Asia Capital.
The Hong Kong-based PE firm is reportedly gathering about $1 billion for the fund, which is part of the firm’s direct lending platform that seeks to offer senior secured and mezzanine corporate and real estate financing solutions to Asian firms.
The fund’s predecessor, Asia Loan Fund III, had hit its hard cap of $950 million last year. It secured capital commitments from a dozen LPs, including sovereign wealth funds and pension funds from North America, Australia, and Asia.
Texas Permanent School Fund now joins the San Francisco Employees’ Retirement System (SFERS) in backing PAG Asia Loan Fund IV. SFERS in November approved a capital commitment of $100 million to the fund.
The commitments to KKR and PAG were part of the $490 million in total allocations that the Texas fund made to private equity, real estate, and hedge funds in the three months ended June.
In the private equity space, Texas Permanent also committed capital to Francisco Partners Agility II, Francisco Partners VI, VIP IV, and Sterling Group Partners V. In real estate, the fund approved investments in Longmont Realty Fund II and VILA Multifamily Partners 1B.