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SC aims for 12% secondaries exposure

The South Carolina Retirement System Investment Commission plans to increase its exposure to secondaries over a five-to-seven year period.

The South Carolina Retirement System Investment Commission plans to increase its exposure to private equity secondaries from 10 percent to 12 percent in the next five to seven years, according to documents from its November board meeting.

South Carolina will “continue to maintain meaningful exposure” to secondaries, citing “tactical benefits and j-curve mitigation” as reasons to invest in the market.

The pension will increase its exposure to secondaries while decreasing its commitments to fund of funds and growth equity funds.

Fund of funds are no longer part of South Carolina’s investment plan and remaining fund of funds investments will run off until a 3 percent allocation is reached. Exposure to growth equity funds will continue, but at a target of 20 percent, from 25 percent.

Since inception, South Carolina has committed $480.6 million to six secondaries funds. At least three of the funds are managed by Industry Ventures. Last year, the pension committed $40 million to each of Industry Ventures Special Opportunities II and Industry Ventures Secondary Fund VII, according to PEI’s Research and Analytics division.

The six funds have a net asset value of $263.2 million and are generating a net internal rate of return of 12.95% as of 30 June.

South Carolina has $29.2 billion of assets under management as of 30 September.

Source: South Carolina Retirement System Investment Commission