The San Bernardino County Employees’ Retirement Association (SBCERA)’s investment committee has approved its second secondaries fund commitment this year.
It recently approved a $25 million commitment to SL Capital Partners’ Secondary Opportunities Fund II (SOF II), according to documents from its March meeting. The commitment will be reviewed by SBCERA’s board of retirement in April.
SBCERA has been considering the commitment since earlier this year because it has an existing relationship with SL Capital. It committed $25 million to the firm’s predecessor vehicle (SOF I), which “has performed to expectations”, according to the documents.
SOF I closed on $190 million in February 2014, while SOF II has a $200 million target.
The two funds have the same investment strategy of investing in secondaries opportunities in funds of funds, secondaries funds and directs. However, the fee structure has changed for SOF II. Limited partners in SOF II will pay a 10 percent carried interest rate over a 12 percent preferred return, whilst LPs in SOF I paid a 10 percent carried interest rate over a 14 percent hurdle.
SBCERA has $7.88 billion of assets under management and allocated $350 million to private equity funds in 2015. The commitments include $55 million to secondaries funds. Last year it committed $30 million to Industry Ventures’ seventh secondaries fund, which closed on $425 million. About 25 percent of the fund had been deployed as of the end of 2014.
The bulk of SBCERA’s private equity allocation, or $80 million, is reserved for diversified funds of funds, with an additional 60 percent reserved for each distressed opportunities and new opportunities, the documents disclosed.
Source: San Bernardino County Employees’ Retirement Association