Secondaries boost SBCERA PE performance

The $8.7bn southern Californian pension has sizeable commitments with SL Capital Partners, Partners Group and Industry Ventures.

San Bernardino County Employees’ Retirement Association‘s private equity bucket, which includes sizeable commitments to secondaries funds, returned 7 percent gross for the second quarter.

The Southern California pension fund’s return for the three months ending 30 June beat its benchmark for the Cambridge Associates Global All Private Equity, according to documents for Thursday’s upcoming board of retirement meeting. The Cambridge benchmark lags by one quarter and posted a quarterly gross return of 3.8 percent.

The pension has significant relationships with 26 private equity and private debt managers, with sizeable commitments with SL Capital Partners, Partners Group and Pathway Capital Management. Among its top performing investments are Industry Ventures Fund V, which returned an IRR of 32.2 percent, Apollo Investment Fund VII, which returned 24.19 percent, and Tennenbaum Energy Opportunities Fund, which returned 21.53 percent.

The pension fund as a whole posted gross returns of 2.6 percent for the quarter, barely missing its 2.7 percent benchmark, but year-to-date gross returns came in at 6.2 percent, meeting the fund index.

In February SBCERA was considering the purchase of a stake in Kayne Anderson Capital Advisors’ seventh energy fund from an “affiliate of the general partner”.

SBCERA also posted a 9.3 percent return for the first half of the year, a figure that beat the year-to-date Cambridge index’s gross 6.7 percent return by 2.6 percentage points.

The private equity portfolio, for which the public retirement plan set a 16 percent allocation, posted one- and three-year gross returns of 15.7 percent and 11.2 percent, respectively. Five-year gross returns stood at 13.1 percent, while 10-year gross returns were 8.5 percent. Only the decade-long time frame posted returns below the benchmark, at 0.4 percentage points under.

One- and three-year gross returns were 13.7 percent and 5.7 percent, respectively. SBCERA’s gross returns over five years was 8.8 percent and 10 years was 4.3 percent.