The Teachers’ Retirement System of the State of Illinois (TRS) committed up to $300 million to Apollo Investment Fund VIII at its meeting Thursday, retirement system spokesman Dave Urbanek told Private Debt Investor.
The $39.4 billion retirement system also committed up to $20 million to ICV Partners’ third fund and New Mountain Partners IV, Urbanek said. The retirement system classified all three investments as private equity commitments.
Apollo is seeking $12 billion for Fund VIII, which will invest in opportunistic buyouts, corporate carve-out transactions and distressed investments, according to Oregon Investment Council documents. Over the last few years, Apollo has shifted the strategy of its flagship vehicles from traditional buyouts to distressed investments, which includes credit and distressed buyouts. Approximately 60 percent of the firm’s $14.7 billion Fund VII went to distressed investments, compared to 27 percent and 23 percent in Fund V and Fund VI respectively, according to a presentation delivered to the Teacher Retirement System of Texas.
Fund VII had generated a 1.76x total value multiple and 24.5 percent internal rate of return as of 31 March, according to Oregon Public Employees Retirement Fund documents.
ICV investments are characterised by a mix of equity and senior debt. The New York-based firm typically invests between 45 percent and 55 percent of a transaction as equity with the remainder as debt, according to its website. ICV administers approximately $100 million in TRS investments.
“This structure provides for safe balance sheets in tough market environments and operational flexibility to make needed investments in the company,” according to the firm.
New Mountain is targeting $3 billion for its fund, according to Pennsylvania Public School Employees’ Retirement System documents. The fund will invest between $100 million to $500 million per transaction in North American mid-market investments.
TRS’ private equity portfolio was valued at approximately $4.4 billion as of 31 March, according to its website. The portfolio had generated a 14.9 percent one year return as of the same date.