Staff managing the alternatives portfolio for the Oregon Public Employees Retirement Fund have recommended a $400 million commitment to Stonepeak Infrastructure Fund III, according to documents published ahead of the state’s investment council meeting.
The commitment would be the third time OPERF has invested with Stonepeak, after ploughing $100 million into the firm’s first fundraise in 2012 and $400 million into its second vehicle in 2015.
Oregon’s alternatives staff described the allocation as an “anchor commitment” within OPERF’s $1.3 billion infrastructure portfolio. Its target allocation is $1.8 billion to $2.7 billion, or 20 to 30 percent of its alternatives portfolio.
Fund III will reach a first close “on or about” 30 September and is targeting $5 billion with a $7 billion hard-cap, according to the investment council’s documents. The vehicle is aiming for a 12 percent net internal rate of return inclusive of a 4 percent cash yield. Stonepeak is charging a management fee on committed capital with a “standard” carry and preferred return. It has a five-year investment period, and a 12-year duration with the possibility of three, one-year extensions.
Stonepeak Infrastructure Fund III will focus on mid-market brownfield and greenfield investments in North America, across the power, water, energy, communications, renewable energy and transportation sectors. It will make equity investments of between $100 million and $1 billion aimed at controlling stakes, according to Oregon’s documents.
Last month, the fund picked up a $50 million commitment from the New Mexico Educational Retirement Board.