PE HUB Wire Highlights, 1.4.19


Private Equity Editor Chris Witkowsky reflects at home. Photo by Wendy Witkowsky

CalPERS interviews PE pros for new structure, PE and no-fault divorces

Happy Friday!

Good to get back into the grind, especially on a three-day week. Nice way to ease back into maelstrom.

CalPERS: The largest pension system in the U.S. has interviewed four teams of private equity professionals to run to new investment vehicles that will directly invest in companies. Two of those teams are still under consideration,a source told LP reporter Dietrich Knauth recently.

Bloomberg reported this week that the system has interviewed Silver Lake executives David Roux, who co-founded the firm and is no longer there, and Adam Grosser, who led the firm’s Kraftwerk fund and is now a senior adviser at the firm. John Cole, CalPERS investment officer, toldBloomberg the system is not close to a deal.

The system is expected to move quickly on the PE plan, potentially bringing a finalized version to the board in February, Dietrich reported. The plan calls for the creation of two CalPERS-controlled funds focused on long-term investments and late-stage health, science and tech companies.

That doesn’t mean the system will have hired managers for the vehicles by February, though. That process will likely take much longer.

“The potential partners we are considering have … their own pipeline and their own level of due diligence going on in the marketplace,” Cole said at a meeting in December. “So it’s not starting from a standing start.”

CalPERS has faced a lot of criticism of the plan and its private equity program overall since the bad old days just after the financial collapse. It has struggled ever since to cut the costs of the program, negotiate terms with existing managers and find ways to use its huge leverage to cut better deals.

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Update: This report was updated to indicate that David Roux is no longer with Silver Lake and Adam Grosser is a senior adviser at the firm.