The Oregon Investment Council’s investment staff boosted its annual commitment pace to private equity (which includes distressed debt, mezzanine and secondary funds) from $2 billion to $2.6 billion, spokesperson James Sinks confirmed to Private Debt Investor Thursday. The increase did not require Council approval, as it will allow Oregon to maintain its 20 percent target allocation to private equity strategies.
“That’s the target they’re going to look at, but cash flows are definitely going to play a role in that,” Sinks said. “It’s a target not an edict.”
In a report included in the OIC’s 5 March meeting materials, investment advisor TorreyCove indicated that Oregon’s exposure to private equity would fall below 20 percent before year end because of significant realizations from the retirement system’s 2005-2007 vintage funds. In order to maintain that allocation, Oregon will gradually boost its targeted commitment account to $2.6 billion over the next three years.
Oregon committed $1.757 billion to private equity strategies last year, $175 million of which went to distressed and mezzanine strategies.
The $87.5 billion retirement system’s private equity special situations allocation was valued at $1.658 billion as of 30 September, according to the TorreyCove presentation. That includes commitments to distressed, mezzanine and secondary funds.
In January, Oregon approved $950 million in commitments to TPG, including $250 million $250 million to, TPG Special Situations Partners Adjacent Opportunities fund. The opportunistic fund will provides TPG’s special situations group with flexible capital to pursue opportunities that exist outside Opportunities Partners Funds and its Specialty Lending fund mandates, according to a TorreyCove Capital Partners memo.
OIC committed an additional $700 million to TPG Capital Partners Strategic Account. The account serves as an interim buyout vehicle that will roll into the TPG Partners VII, which the firm is expected to begin formally marketing with a $10 billion target later this year.