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Q1 2021 Investor Activity: Private Equity & Private Debt Takeaways

by Andrés Ramos, Content Marketing Specialist – eVestment Private Markets

Each month, eVestment aggregates reported commitments from the public pension plan investors tracked by our market intelligence tool, Market Lens, to provide insights on the asset classes and fund managers to which and to whom these investors are committing capital.

With data through Q1-21 now collected, the March 2021 report highlighted a bumper quarter for private equity appetite from this investor group compared to Q1-20 – only to be outshone by private debt activity.

Who were the most active investors? And where did the capital flow? Read on to find out.

Private Equity

Reported commitments to Private Equity funds from pension plans totaled $17.8 billion in 1Q 2021, a 12.3% increase from 1Q 2020.

CalPERS reported both the largest number of commitments and commitment amount with 17 and $4.3 billion respectively.

While making just five commitments Minnesota State Board just about matched CalPERS in terms of bitesize, with an average reported commitment size of $250 million. At the other end of the spectrum was Los Angeles Fire & Police whose 12 reported commitments in the quarter averaged just $43 million in size.

In terms of fund managers receiving commitments, in the first quarter, pension plans reported nine commitments to Hellman & Friedman for a total of $1.2 billion. A majority of those commitments flowed to Hellman & Friedman Capital Partners Fund X, the fund manager’s latest $20 billion flag ship fund. Minnesota State Board, New Jersey Department of Investment, and Pennsylvania PERS were among the fund’s investors, with each reporting commitments of over $100 million.

The three reported commitments to Thoma Bravo all flowed to the manager’s Thoma Bravo Fund XIV and were all from pension plans in the quarters top 10: CalPERS ($600 million), Oregon PERS ($250 million), and Border to Coast ($100 million).

Interestingly, each of the five reported commitments to AlpInvest went to co-invest, sidecar, or SMA vehicles. Co-investments have been an area of focus for fund managers as they seek to access top performance deals with more favorable fee arrangements.

Private Debt

Reported commitments to Private Debt funds from pension plans in 1Q 2021 were 46.5% higher than the previous year and indicate sustained interest in the asset class from institutional investors. The quarter saw $8.2 billion in reported commitments, compared to $5.6 billion in Q1 2020.

While the year over year figures saw a large jump, the Q1 2021 figure is consistent with quarterly activity seen in the asset class since the beginning of the pandemic. Reported quarterly commitments for the trailing four quarters, including Q1 2021 averaged $9.4 billion, nearly double the average ($5.8 billion) from the preceding four quarters dating back to Q2 2019.

As in Private Equity, CalPERS, Oregon PERS, and CalSTRS again took top 3 positions in terms of activity for Private Debt. Oregon PERS’ three largest reported commitments went to Oaktree ($350 million), Oak Hill ($300 million), and Clearlake ($200 million).

A commonality shared among the three fund managers who garnered the most reported commitments in the first quarter was CalPERS. The pension plan reported commitments to each of the three. Ares also saw commitments from Alaska Permanent, Vermont Pension, and Iowa PERS.

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