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.

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. 

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.  

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. 

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. 

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.