Connecticut names private capital consultant finalists

Connecticut State Treasurer Shawn Wooden’s office named three finalists for the private capital consulting services search underway for the $38 billion Connecticut Retirement Plans & Trust Funds. The finalists named at this week’s investment advisory council meeting were: Aksia, Hamilton Lane and the StepStone Group. Connecticut’s private equity and private credit consulting services are provided currently through separate contracts with StepStone and Meketa, respectively. The RFP was initiated to address the scheduled expiration of StepStone’s original contract term and to allow the CRPTF the opportunity to consolidate private capital consulting services with one firm, thus providing the benefits of increased staff and fee efficiencies along with enhanced services, according to a memo from Treasurer Wooden. The work of the private capital portfolios continues though. As Treasurer Wooden pointed out in a recent Alternatives Watch interview, alternative investments are diversifiers in the CRPTF portfolio in they account for 32% of the overall investment program. Two funds were approved to be added to the private equity program – Clearlake Flagship Plus Partners ($100 million) and Secondary Overflow Fund IV ($50 million). Clearlake Capital Group is expected to have limited partner capital commitments of between $1.5 billion and $1.75 billion with a focus on investing alongside Clearlake’s two flagship strategies as well as in other opportunistic debt and equity transactions. Connecticut already has exposure to both Clearlake Capital Partners and Clearlake Opportunities Partners. According to a memo from State Treasurer Wooden, the Flagship Plus Partners fund will have the flexibility to capture an expanded set of attractive credit, hybrid capital and equity opportunities resulting from the economic and capital disruptions due to COVID-19. The Secondary Overflow Fund IV (SOF IV) follows on previous commitments to the firm’s Dover Street X and SOF IV, which closed last December. SOF IV co-invests alongside Dover X in certain secondary transactions that, due to size or concentration levels, create an overflow investment opportunity for SOF IV. “Both of these commitments offer the CRPTF with a compelling opportunity to gain additional exposure to high quality managers pursuing differentiated strategies in an environment made more favorable as a result of the global economic disruptions caused by the pandemic.” said State Treasurer Wooden. Within the real assets portfolio, three additional funds were approved. IPI Partners was approved for a commitment of up to $100 million for its strategy focused on data centers and technology-related real assets. Another allocation of up to $150 million was approved for the ISQ Global Infrastructure Fund III LP, which is managed by I Squared Capital Advisors. The fund will focus on development of investment platforms within the mid-market segment while opportunistically making larger investments in assets that benefit from the firm’s global footprint and operational resources and expertise. TruAmerica Workforce Housing Fund was approved for an allocation of up to $50 million. The fund is managed by TruAmerica Multifamily Investments, a multifamily-focused real estate firm headquartered in Los Angeles. The fund will focus on investments located principally in the Western U.S. as well as select markets in the Eastern U.S. “All three strategies would further diversify the CRPTF exposure to real assets and provide inflation protection as well as stable cash yields over time,” said State Treasurer Wooden. “Commitments made to these funds will be deployed through the economic recovery and will provide strong risk-adjusted returns for the plans and trusts.” In other developments, fund of hedge fund firm Appomattox Advisory was terminated, after having underperformed its benchmark. The firm originally was placed on a watchlist in September 2019 and managed approximately $175 million for the pension system. The AIF program that housed Appomattox is in the process of being redesigned to direct investment implementation of risk mitigating hedge fund strategies. Within the emerging manager portfolio, meanwhile, fund of hedge funds firm Rock Creek was approved at last month’s investment advisory committee meeting.

Connecticut names private capital consultant finalists

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