The Louisiana State Employees’ Retirement System has chosen Coller Capital to manage its $100 million mandate to acquire private equity assets on the secondary market, LASERS chief investment officer Bobby Beale told Private Equity International.
“Secondaries was an area of focus this year as part of our annual private equity commitments,” Beale said in an email.
This is not LASERS’ first investment in secondaries, Beale said. The mandate is not considered a separately managed account.
Coller beat out Paul Capiutal and W Capital Partners for the mandate. Executives from all three firms were set to appear at LASERS 21 June board meeting for a final round of interviews, according to Louisiana state documents.
LASERS is one of several retirement systems and pension plans to become active in the secondaries market in the last few months. In May, the New Jersey Division of Investment acquired a $5.8 million stake in Tenex Capital Partners’ debut fund. The pension system also assumed an additional $14.8 million in commitments, bringing its overall commitment to Tenex’s vehicle to $70 million.
The Washington State Investment Board also has a history of employing the secondary market to expand its commitments. The pension system has taken secondary positions in funds raised by Southern Cross, Phoenix Partners, Warburg Pincus International Partners and Francisco Partners and its total activity as a secondary investor amounts to a little less than $21 million as of 30 June, 2011, according to documents.
Secondary deal volume was projected by some market professionals to top $25 billion in 2012, which would have set an industry record for the third year in a row. The burgeoning market has allowed specialist firms like Coller to flourish as many LPs have engaged the market as a seller to shed fund manager relationships or come into compliance with new US and European regulations. However, the ongoing turmoil in Europe, and the stubborn inability of the US market to grow out of its economic stagnation, has left some investors uncertain as to the future of world markets. The uncertainty could work to slow secondary deal activity, several secondary market investors said in recent interviews.
Coller is expected to hold a final close on its $5.75 billion sixth fund at some point in the near future, a source told Private Equity International in March. The firm has already completed at least one transaction through the fund, acquiring Crédit Agricole Private Equity, an investor in European SMEs that has been renamed Omnes Capital. Specific transaction details weren’t disclosed.
Several other firms have hit the market with their own secondary funds. Lexington PArtners, AXA Private Equity and Partners Group have all closed funds in the last year, and Hamilton Lane and Paul Capital are also on the fundraising trail.