US public pension plans’ alternative asset commitments in 2017

This LP profile made almost 950 commitments to various private vehicles last year.

Private equity made up the plurality of commitments to alternative asset funds in 2017 by US public pension plans, according to data from eVestment. Private equity made up almost 45 percent of the allocations put aside for private equity, real assets, private debt and fund of funds strategies. The real assets category includes real estate, raw land, infrastructure and any other similar assets.

Fundraising was a mixed bag across the asset classes, according to data from four of PEI Media’s titles.

Private equity fundraising increased for the second year in a row, hitting $409.64 billion, the highest since the global financial crisis and near the 2008 high of $433.16 billion. Indeed, the year saw the largest buyout fund ever raised, Apollo Global Management’s Apollo Investment Fund IX, which collected almost $25 billion.

Capital set aside for private credit soared in 2017, hitting $180.1 billion after raising only $111.01 billion in 2016. The previous high for private credit fundraising was $133.02 billion in 2013. Several European funds rounded up vast sums, with Intermediate Capital Group’s ICG Senior Debt Partners Fund III closed on €5.2 billion along with Alcentra’s Alcentra European Direct Lending Fund II on €4.3 billion. Hayfin Capital Management’s Hayfin Direct Lending Fund II on €3.6 billion and Hayfin Special Opportunities Fund II on €2.2 billion.

Infrastructure and real estate fundraising, by contrast, experienced slowdowns. Real estate fundraising, which includes debt and equity, raised $93 billion, down from last year’s $117 billion and a significant decrease from 2008’s total of $160 billion. Infrastructure commitments totalled $57.9 billion, decreasing for the second year in a row.