The Teachers’ Retirement System of Illinois has committed an additional $100 million to The Blackstone Group’s sixth fund, which is targeting $15 billion and had collected at least $8 billion as of February.
Illinois Teachers’ committed $50 million to the fund in October, but decided to up the investment after the board hiked the pension’s allocation to private equity from 8 percent to 10 percent in May. The pension’s actual allocation to private equity is at about 9 percent.
The $50 million commitment, “deemed conservative at the time, was recommended due to volatile market conditions and uncertain levels of liquidity at [the pension]”, a pension spokeswoman said. “TRS embraces increasing commitments with its existing private equity general partners that have already demonstrated a successful track record,” the spokeswoman said.
The pension, with total assets of $27.2 billion as of 31 March, has a “high conviction” in Blackstone and believes the firm “navigated the market turmoil extremely well during the past year because of its limited and conservative commitments made at the very top of the market cycle in 2006”, the spokeswoman said. “The fund is global in scope and not confined to a specific sector, creating good deal flows.”
Blackstone last year lowered the target for Fund VI from $20 billion to between $15 billion and $20 billion. The fund’s predecessor closed on $21.7 billion in 2006.
The firm marked down its private equity portfolio by 3 percent in the first quarter, compared to 20 percent in 2008. The private equity business had revenues of $68.4 million in the first quarter, compared to losses of $193.6 million in the fourth quarter of 2008 and $116.7 million for the first quarter of 2008.
Blackstone deployed $196.1 million of LP capital in the first quarter, a decrease from the $340.1 million it spent in the first quarter of 2008 and $1.1 billion in the fourth quarter last year.