Clwyd Pension Fund has committed $10 million to SL Capital Partners‘ latest flagship secondaries fund, according to minutes from the pension’s investment committee meeting.
SL Capital SOF III, which is targeting $400 million, reached its first close on $213 million in October 2016, Secondaries Investor reported.
It is aiming for a net internal rate of return of 17 percent, the minutes revealed.
Clwyd, based in north-east Wales, had invested $15 million in predecessor SL Capital SOF II. That 2014-vintage fund closed above its $200 million target on $291 million in May 2016.
Other investors in SOF III include Cumbria Local Government Pension Scheme and San Bernardino County Employees’ Retirement Association, both with $25 million commitments, according to PEI data.
Terms of SOF III were revealed in April in a due diligence report prepared for SBCERA, as Secondaries Investor reported. The fund has a 10 percent carried interest rate and a 10 percent hurdle rate, compared with hurdle rates of 12 percent for SOF II and 14 percent for SOF I.
SOF III will target less competitive areas of the market such as fund of funds stakes and stakes in secondaries funds. There is no fee on undrawn capital and no single deal can exceed 25 percent of the fund’s value, the due diligence report reveals.
Clwyd has been an active investor in secondaries funds, having made commitments to JPMorgan Secondary Private Equity Investors II, Partners Group Secondary 2011, Capital Dynamic Global Secondaries IV and Unigestion Secondary Opportunity Fund III over the past six years, according to PEI data.