New York State Common bets big on Leonard Green

New York State Common Retirement Fund re-upped $182 million to Leonard Green & Partners’ seventh flagship fund in June, according to an investment report released this week.

Green Equity Investors VII held a final close on $9.6 billion in June. The Los Angeles private equity firm will use Fund VII to acquire businesses valued at $500 million to $5 billion, Los Angeles City Employees’ Retirement System documents show.

New York State Common has been extremely active in PE over the past year, earmarking larger commitments to its existing relationships. New York’s allocation to Green Equity Investors VII marks its fifth commitment to a Leonard Green fund.

The $178.3 billion retirement system committed $450 million across four prior vehicles, including $200 million to the firm’s 2012 vintage fund. Fund VI, which raised $6.25 billion, netted a 13.4 percent internal rate of return through Sept. 30, according to LACERS documents.

In June, Buyouts reported Leonard Green would write larger equity checks with Fund VII. The firm may commit as much as $1 billion of equity per deal.

Fund VII’s $9.6 billion includes a $500 million commitment from the general partner. At a little more than 5 percent of committed capital, Leonard Green’s commitment is slightly above the 1.1 percent to 5 percent most GPs allocate to their own funds, according to Buyouts’ most recent compensation study. Only 36 percent of firms’ GP commitments exceed 5 percent.

New York valued its PE portfolio at $14.2 billion as of March 31, 2015, according to its most recent annual report.

Action Item: New York State Common Retirement Fund: www.osc.state.ny.us/

New York State Comptroller Thomas DiNapoli speaks during an interview with Reuters.  Photo courtesy Reuters/Brendan McDermid