Private equity vet raises $400m from CalPERS

Former Hicks Muse principal and New Jersey pension investment pro Cesar Baez has raised $400m from the California pension to establish an ‘emerging manager’ fund.

Cesar Baez, a former principal at Hicks, Muse, Tate & Furst (now HM Capital Partners), has secured a $400 million (€314 million) investment from the California Public Employees’ Retirement System (CalPERS) pension fund to set up Centinela Capital Partners, a new private equity fund of funds for emerging managers, CalPERS said in a statement.

The managers at Centinela will invest in venture capital, expansion capital and leverage buyout transactions, the statement said.

Clark McKinley, an information officer at CalPERS Office of Public Affairs, said in an email: “By ‘emerging managers’ we mean typically under-capitalized managers, often in young firms or start-ups, that operate in overlooked, underserved markets—for example, fast-growing ‘minority’ areas that have potential for good investment returns if given proper capital and other resources.

“Our rationale as a long-term investor is that we will do well to diversify our portfolio—not only with asset classes, but by reaching diverse populations,” said McKinley, who noted that Baez is Hispanic and has extensive contacts in minority communities that will be beneficial in the creation of this fund.

CalPERS has assets totaling more than $220 billion. It manages retirement and health benefits for 1.5 million current and retired public employees and their families as well as 2,600 California public employees. CalPERS delivered a return of 19.2 percent in the 12 months ending on June 30 of this year, helping lift its overall performance to 12.3 percent.

Cesar Baez has more than 27 years of experience in private equity, asset management, media and investment banking. He is currently the head of strategy, institutional business development and private equity for Deutsche Bank Alternative Investments, a division of Deutsche Bank Asset Management. He has also served as the head of alternative investments for the state of New Jersey Investment Division, a $72 billion defined benefit plan, the statement said. There, he set up the first alternative investment program in the pension fund’s history. New Jersey’s investment council approved a 13 percent allocation of alternative investments, marking a major new institutional player in the private equity market, in November of 2004.