Louisiana Teachers' has $305m for ‘real assets’

The allocation will mostly target infrastructure and commodities funds, according to a senior pension official. The $11.4bn pension has already committed $100m from 'real assets' to Energy Capital Partners.

The $11.4 billion Louisiana Teachers’ Retirement System has carved out a dedicated amount for infrastructure investments for the next 12 months and inked its first deal, according to a senior pension official.

Philip Griffith, chief investment officer with Louisiana Teachers’, said the pension is looking to invest $305 million in “real assets”, which will mostly target infrastructure and commodities funds. The goal is to deploy the capital during the pension’s current fiscal year, which ends 30 June 2011.

Last week, the pension made its first commitment out of the “real assets” allocation. It invested $100 million in Energy Capital Partners’ second fund, which is targeting $3.5 billion for energy infrastructure investments across North America.

The real assets bucket is opportunistic, Griffith added, and includes real estate investments as well. However, the pension hasn’t committed to a real estate fund since early last year. The pension did commit $50 million this year to Blackstone Real Estate Special Situations Fund II, but Griffith said the pension considers that a debt-related fund. 

“We’ve historically had a real estate portfolio. We’ve made commitments for the last 10 years … a lot of these folks have not made any [investments],” Griffith said. “And they haven’t been sending anything back.”

Overall, Louisiana Teachers’ has a target allocation of 9 percent to real assets, and an actual allocation of 5.6 percent.

Louisiana Teachers’ is also reserving $350 million in its next fiscal year for commitments to debt and credit vehicles. They have accounted for the bulk of the pension’s commitments this year. Already, the pension has committed to American Securities Opportunities Fund II, Blackstone Real Estate Special Situations Fund II, Merit Mezzanine Fund V, OHA Strategic Credit Fund and Peninsula Fund V.

Private equity will get $245 million, according to Griffith. Louisiana Teachers’ this year committed to some smaller funds, directing €37.5 million to Gilde Buy-Out Partners IV in June and $35 million to Enhanced Equity in January.

The pension is over-weighted to private equity, with a target of 10 percent and an actual allocation of 13.2 percent.

There is no plan to sell any private equity assets on the secondaries market, Griffith said.

Christopher Witkowsky contributed reporting to this article.