New Jersey reports FY 2019 results, makes new PE commitments

New Jersey State Investment Council had a 10.03 percent return on its private equity investments in fiscal 2018-2019, according to meeting materials provided to Buyouts.

While PE performed second-best of all the state pension fund’s asset classes, it also failed to meet its benchmark of 12.29 percent.

The fund’s overall return in FY 2018-2019 was 6.27 percent, also below its 7.07 percent benchmark.

New Jersey also approved just under $400 million in new private equity commitments at its meeting Sept. 25, a source confirmed to Buyouts.

The commitments were:

• €125 million ($136.6 million) to Ardian Buyout Fund VII, managed by Ardian, which has a €6 billion ($6.6 billion) target and a €6.5 billion ($7.1 billion) hard cap, and will do about 90 percent of its investments in Europe and a maximum of 10 percent in the U.S., according to the meeting materials, with a focus on “the upper mid-cap market segment”;

• €50 million ($54.6 million) to a co-investment sidecar vehicle with Ardian alongside the fund;

• $175 million to KPS Special Situations Fund V, run by KPS Capital Partners, which launched this year and has a $5 billion target and $6 billion hard cap, with a 1.25 percent management fee and a 30 percent carry, according to the meeting materials;

• $25 million to KPS Special Situations Mid-Cap Fund, also run by KPS, which has a $750 million target and a $1 billion hard cap and the same fee structure, according to the meeting materials.

According to the materials, the KPS Mid-Cap Fund will be part of the same strategy as Fund V, but “will seek out deals in the lower middle market that are deemed too small for the flagship platform.” Both funds will focus on “basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment, and general manufacturing.”

As of Aug. 31, the fund’s buyouts and venture capital portfolio was valued at $7.76 billion, and the entire fund at $75.65 billion.

Action item: Read New Jersey’s most recent investment reporting package from August here.