The Employees Retirement System of Texas plans to nearly double the current size of its infrastructure portfolio in the upcoming fiscal year with a view to growing it to $2.62 billion by 2023.
The pension fund – the infrastructure portfolio of which had a net asset value of $571.2 million as at 30 September, accounting for 2 percent of its $29 billion portfolio – said in a recent document, it was targeting total commitments to the asset class of $450 million with a range of between $315 million and $585 million in fiscal year 2019. Texas ERS previously set its fiscal year 2018 target infrastructure allocation at $400 million, according to pension documents.
In September, the pension fund increased an earlier commitment it had made to Actis Long Life Infrastructure Fund by $43.3 million, bringing its total investment in that vehicle to $93.3 million.
Launched last year, the Actis Long Life Infrastructure Fund is the first dedicated infrastructure strategy with a 15-year fund life from the London-based firm. An emerging markets specialist manager, Actis has raised several energy-focused funds over the years, drawing a $125 million commitment from Texas ERS for Actis Energy 3 and $100 million for Actis Energy 4.
In 2009, the firm closed Actis Infrastructure 2 on $750 million, but that fund still had an energy and power focus and is considered a predecessor to Actis Energy 3, which closed on $1 billion in 2013.
In March, Infrastructure Investor reported Actis was expecting to hold a first close on $700 million for the Actis Long Life Infrastructure fund, and a final close of $2 billion by the end of the year.
The vehicle is different from its four previous energy funds, which focused on greenfield and development projects. The most recent fund, Actis Energy 4, closed on $2.75 billion in March 2017, with the bulk of commitments coming from US institutional investors.