ERS Texas scales back Landmark commitments

The $26bn pension has backed two of the secondaries firm's funds with a combined $150m, half of what it committed to predecessor vehicles.

Employees Retirement System of Texas has invested $150 million in two Landmark Partners funds, half the amount it invested in the same programme series in 2014.

The $26.2 billion retirement scheme committed $87.5 million to Landmark Equity Partners XVI and $62.5 million to Landmark TX ERS Co-Investment Fund II, according to data released by the pension fund on Wednesday.

Landmark is raising Equity Partners XVI, which has a $4 billion target and a $4.7 billion hard-cap, according to materials from a New Mexico State Investment Council meeting.

The co-investment vehicle is the second between Landmark and ERS, following a dedicated co-investment fund established in October 2014, according to PEI data. ERS’s investment policy states it cannot invest more than $50 million in a co-investment vehicle without approval from the board of trustees.

The investments continue a relationship which began in 2014 when ERS committed $175 million to Landmark Equity Partners XV and $125 million to Landmark TX ERS Co-Investment Fund I.

Prior to these two investments, ERS’s commitments with Landmark comprised 8.6 percent of its private equity investments, its second largest relationship with any general partner.

The pension fund has also backed a $15 million co-investment alongside London-headquartered secondaries firm Headway Capital Partners on a deal from the firm’s third fund at the end of 2016, according to a source.

ERS said in an update to its investment policies last year that beginning in fiscal  year 2017 it would evaluate co-investments with GPs in which it did not have a current relationship. The pension plan has not previously invested in a Headway fund.

Last March, ERS came to market with a portfolio of 14 buyout fund stakes worth $951 million, with Lexington Partners acquiring stakes in the process.