PE HUB Wire Highights, 8.2.19


private equity, mergers, M&A
Private Equity Editor Chris Witkowsky reflects at home. Photo by Wendy Witkowsky

In strong fundraising environment, many public systems are under target, LPs work hard to validate fees

Happy Friday!

Here’s an interesting stat out of eVestments’s Private Markets Monitor: As of June 30, 2019, more than 100 public pension plans were underallocated against their private equity targets, which represents more than $41 billion of potential commitments.

This is a good sign that, at least from the public system community, there’s good space for growth to private equity. Considering how strong private equity fundraising has been, the stat is evidence that there’s more room to grow.

So far this year, U.S. firms have raised around $197 billion, according to Buyouts research. Fundraising this year is on track to eclipse 2018, with first-half pace already 93 percent higher than last year, Buyouts found.

LP reporter Teddy Grant will have more on this later today.

Speaking of LPs, we have a retirement. Michael O’Connor, private equity chief for Verizon’s corporate pension fund, retired in June, a spokeswoman confirmed to me. Verizon named Stephen Blundin to replace him to lead private equity for the pension, which is managed by Verizon Investment Management CoCheck it out here.

Fee validationPEI reporter Preeti Signh has an interesting take on public pensions trying hard to figure out exactly how much they pay private equity managers. Oklahoma Teachers Retirement System recently hired Meketa Investment Group to help the system figure out if it’s paying managers the correct fees according to limited partner agreements, after it discovered at least four errors, Singh wrote.

Several public pensions are engaged in this sort of analysis, including New Mexico State Investment Counciland California State Teachers’ Retirement System, she wrote. ILPA teamed up with fund services shop Colmore to offer institutional investors a membership service for fee validation, and service providers have been building their own teams for this type of work, she wrote. Check out her story here.

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