ICERS approves $40m commitment

The $380m US public pension enters its first limited partnership with TPG.

The Imperial County Employees’ Retirement System (ICERS) finalised a $40 million commitment to TPG Sixth Street Partners (TSSP) Adjacent Opportunities Contingent Fund, Retirement Administrator Scott Jarvis confirmed in a phone interview. This investment is ICERS’ first-ever commitment to a TPG vehicle.

In its Adjacent Opportunities (TAO) series of funds, TSSP primarily targets special situations and middle market direct lending investments across the credit cycle. According to board documents presented by Verus, ICERS’ investment consultant, the vehicle is aiming for a gross IRR of between 9 percent and 20 percent, with target returns varying by investment strategies. The Contingent Fund will not deploy its committed capital, however, until TSSP decides to activate it in the future.

ICERS will pay management fees of 1.15 percent on its unfunded commitments and 1.5 percent on its invested capital, though TSSP will collect lower management fees on LP commitments greater than $250 million. TSSP will also earn carried interest of 18.5 percent upon clearing a 5 percent hurdle rate.

The $380 million California-based public pension has a 5 percent target allocation to private debt that currently stands at 1.7 percent. Platinum subscribers may click here for ICERS’ full profile, including key contacts, allocation strategy and fund investments.