The Connecticut Retirement Plans and Trust Funds has committed a total of $90 million to distressed debt funds since May, spokeswoman Marianne Dziedzic told Private Equity International.
The state’s Investment Advisory Council 14 November meeting materials indicate a $50 million commitment was made to TPG Credit Strategies II in October, as well as a recently closed $40 million commitment to Clearlake Capital Partners III. Connecticut has classified both funds as distressed debt.Â
TPG Credit closed its second credit strategies fund well above its $800 million target in late October, raising $997 million to fall just short of its $1 billion hard-cap. The fund will target investments in distressed assets with “some exposure to asset rich distressed corporate credit”, according to a statement. Key sectors include aviation, European non-performing loans and US distressed asset opportunities.
Clearlake Capital Partners III is targeting $600 million for investments in distressed companies in the lower to mid-market, according to reports. Clearlake’s web site advertises a broad strategic mandate, which typically invests in the business services, consumer products, retail, energy, power, industrials, technology, communications, defense, public safety, healthcare and media sectors. Â
In addition to its commitments to distressed funds, Connecticut is also considering a $50 million commitment to Court Square Capital Partners III. A final decision on that commitment is expected to be announced at the 12 December meeting, Dziedzic said.
Court Square is targeting $3 billion for its latest offering, which will invest in buyouts in the US mid-market, according to presentation documents made available by Connecticut. Fund III had reportedly raised at least $2 billion as of July.Â
Fund III has a 1.5 percent management fee through the expiration of the commitment period and a 1 percent fee thereafter on unreturned investment contributions, according to presentation documents.
The fund is targeting a January 2013 final close, according to a report from the Connecticut State Treasurer’s office.Â
Court Square’s previous fund, a $3.1 billion 2006 vintage, was generating a 1.3x multiple on invested capital and 9.7 percent net internal rate of return as of 30 June, according to presentation documents.
Connecticut commits $90m to TPG Credit, Clearlake
In addition to its $90m in commitments across two distressed funds, the State Treasurer also is considering a $50m commitment to Court Square Capital Partners’ $3bn third vehicle.