Who's got the money?

We identify 10 limited partners that have capital to invest. A snapshot of their appetites and allocations reveals a diverse market – and hope for those raising funds. By David Snow

It's hard to find anyone involved in the private equity fundraising market this year having much fun. But it is equally hard to find anyone, especially placement agents, who will tell you that nobody has capital to invest. In fact, many limited partners do have dry powder – it's just that in this market they will be quite stingy about who they give it to, and under what terms.

Those LPs with capital tend to be institutions without longstanding private equity programmes, or with minimal exposure to other alternative investment strategies. In general, the ten groups below are simply fortunate institutions that for any number of reasons still have plenty of cash to deploy. All are aware that now is a much better time to commit to private equity than during the fundraising peak of 2006 and 2007.

1. EMPLOYEES RETIREMENT SYSTEM OF TEXAS
Total assets under management (AUM): $21 billion

Allocation to private equity: 8 percent Texas ERS may not be the first large public institution in the state to target private equity, but it may be the luckiest. The pension decided just last year to enter the asset class, and to put to work roughly $1 billion per year over the next four years. A statement from pension board documents makes clear that the institution's overseers realise their initial allocation is well timed: “It is expected that there will be a robust pipeline of high-quality opportunities that will be available in the coming 12 months.”

2. GOVERNMENT OF SINGAPORE INVESTMENT CORPORATION
Total AUM (estimated): $330 billion Allocation to private equity: 8 percent

Few outside of the powerful GIC know exactly how much capital this seasoned investor has, but it's a lot. If one estimate is accurate, its 8 percent allocation to private equity means GIC has a target allocation of some $26 billion to private equity. GIC is a major player throughout the world as a direct investor, but it has extensive relationships with more than 100 private equity GPs through its Special Investments division, led by Teh Kok Peng. GIC has additional offices in Beijing, London, San Francisco and New York.

3. UNITED NATIONS JOINT STAFF PENSION FUND
Total AUM: $35 billion

Allocation to private equity: to be decided

Until now the pension fund for UN employees has gone no further into alternatives than real estate, an asset class in which it has a 5.2 percent allocation. However the fund has recently decided to incorporate private equity and funds of hedge funds into its allocation mix, as well as related assets like infrastructure, agricultural land and timberland. It also wants to increase its exposure to emerging markets. The UN is now seeking out advisers to help it increase its allocation to alternatives. No target allocations have yet been set.

4. AUSTRALIA FUTURE FUND
Total AUM: A$61 billion ($38 billion; €30 billion)

Allocation to private equity: 1.8 percent

The many well-capitalised superannuation funds based there are already reason enough to spend serious time fundraising in Australia. But the recent creation of the Future Fund has meant a new pool of capital, and one that may increasingly gravitate to private equity. While the Melbourne-based sovereign wealth fund currently has “only” 1.8 percent of its assets in private equity, a recent Future Fund report makes clear that this number may go up. It reads:

“We have… made modest increases in the private equity and infrastructure sectors as other investors restructure their portfolios and quality assets become available.”

5. ALBERTA HERITAGE FUND
Total AUM: C$14.5 billion ($11 billion; €9 billion)

Allocation to private equity: 6 percent

Less well known than the larger Alberta Investment Management, Canada's oil-rich province created the Heritage Fund to take some of the proceeds from the sale of crude and invest it on behalf of “future generations of Albertans”. Oil revenue is down and the province has temporarily halted transfers of cash to the fund, but its private equity allocation is only halfway met. With a target of 6 percent, the fund is at an actual private equity allocation of 3.3 percent. Alberta expects private equity to perform at roughly 11 percent, by far the highest of any asset class it holds.

6. CPP INVESTMENT BOARD
Total AUM: C$108 billion ($83 billion; €66 billion)

Allocation to private equity: 15.3 percent

The Private Investments department at the CPP Investment Board is among the largest backers of private equity funds in the world, and one of the major direct investors in the LP community. Private Investments, led by Mark Wiseman, has since 2001 committed some C$34 billion to private equity fund managers, under the philosophy that deals it can't do itself it will outsource to external GPs. While CPP has been affected by the downturn, it remains a robust investor in private equity and in fact is stepping up its game around the world. Last year it dramatically increased its emerging markets private equity commitments to C$1 billion from C$115 million a year earlier. Wiseman's team has also increased its team to 55 professionals from 37, working from offices in Toronto, Hong Kong and London.

7. SHELL ASSET MANAGEMENT
Total AUM: $70 billion

Allocation to private equity: 7.4 percent

SAMCo, as it is known, is the manager of assets for a number of Shell-related pensions. Fundraisers know the firm well and, now more than ever, find it essential to make the trip to Rijswijk, the Netherlands, in search of investment capital. The private equity programme, led by Robert Klap, is among a lucky group of LPs with “quite a bit of money” at present, according to a placement agent. “The question is, what do they do with the money?” he adds. In SAMCo's case, the group is not afraid to boldly venture into the emerging markets with a first-time fund. For example, Klap's team made a commitment to Hopu Fund, the high-profile new China-focused private equity group.

8. NIPPON LIFE INSURANCE
Total AUM: $450 billion

Allocation to private equity: less than 1 percent

Don't let the “less than 1 percent” allocation fool you – Tokyo-based Nippon Life is a major LP with plenty of appetite for private equity, but with the sophistication to say “no” to most fund opportunities. The private equity programme, led by deputy general manager Hideya Sadanaga, puts to work as much as $500 million per year both locally and around the world. To date Nippon Life has made some $2 billion in commitments to buyout and venture capital funds. Sadanaga also oversees the company's hedge fund and credit fund programmes.

9. FORT WORTH EMPLOYEES' RETIREMENT FUND
Total AUM: $1.6 billion

Allocation to private equity: 7.5 percent

What Fort Worth's municipal pension fund lacks in size it makes up for in momentum. Last September, the pension announced an increased target allocation to private equity and the intention to put some $30 million to work on a yearly basis to reach that allocation. Nothing to be sneezed at, especially for smaller funds and funds of funds. The pension enjoys the highclass problem of not having entered the asset class until 2006, and therefore sidestepped the denominator effect.

10. FUNDS OF FUNDS AND GATEKEEPERS
Total AUM: many billions

Allocation to private equity: in most cases, 100 percent

Fundraising professionals contacted for this article all noted that funds of funds and investment advisers find themselves in particularly strong positions in today's market, or at least the ones to have raised significant funds. Groups like HarbourVest Partners, LGT Capital Partners and Adams Street Partners do not need to worry about over-allocating to private equity as a result of shrunken stock markets. So long as their own limited partners answer capital calls, these groups find themselves in powerful positions, able as they are to write sizeable cheques to worthy GPs.