Santa Barbara pension increased PE commitments in 2016

The pension's secondaries target allocation was as much as 10% of its total portfolio last year, documents from advisor Hamilton Lane show.

Santa Barbara County Employees’ Retirement System (SBCERS) reached new highs for both total fund amount committed and average commitment size during 2016 in an effort to meet its new private equity target allocation.

SBCERS committed $68.5 million to seven private equity funds last year, according to a quarterly private equity review by advisor Hamilton Lane for the pension’s 22 February meeting. The funds included one new partnership with Advent International through its Advent International Global Private Equity VIII.

Hamilton Lane wrote this total amount sat “at top of target range” for the pension’s yearly commitments of $60 million to $70 million. SBCERS is keeping the same range for 2017 commitments.

SBCERS’s target allocation to secondaries was as much as 10 percent, with the same target for direct secondaries, the review shows. The pension’s actual exposure to both strategies was 2 percent respectively as of 30 September 2015.

The annual private equity commitment amount represented a 37 percent increase from the $50 million committed to five funds throughout 2015, according to last year’s private equity review by Hamilton Lane.

SBCERS had increased its private equity target allocation from to 10 percent from 7 percent at its September meeting, following an asset allocation study by investment consultant RVK. The pension’s private equity bucket includes venture capital, special situations, distressed debt and secondaries in addition to buyouts.

As of 31 January, SBCERS’ private equity allocation stood at 7.6 percent, or $202.3 million, of its total fund, according to a separate 22 February meeting document. Its total fund had a market value of $2.65 billion as of that date.

The California-based pension also increased its average bite size for fund commitments in 2016.

Last year, its average was $9.6 million, 20 percent above the $8 million marked in 2015. The average size had been steadily growing since 2010, when it was at $6.5 million.

Here are SBCERS’ commitments to seven funds for its private equity portfolio during 2016:

• Multi-stage venture fund Hamilton Lane Venture Capital Fund (Series 2016), $10 million

• Growth equity fund Technology Crossover Ventures’ TCV IX, $10 million

• Buyout fund Advent International GPE VIII-B, $8.5 million

• Oak Hill Advisors’ distressed-focused OHA Strategic Credit Fund II, $10 million

• Mid-market buyout fund Kohlberg Investors VIII, $10 million

• Buyout fund Platinum Equity Partners IV, $10 million

• Special situations fund SSG Capital Partners IV, $10 million

SBCERS was unavailable to comment.