This tech-driven manager is the favorite of private equity retreats



New data shows that among the pension funds of private equity firms that were allocated capital in 2020, Thoma Bravo, with a focus on software and technology, was the most popular.

Thirteen public pension funds, including the California State Teachers’ Retirement System, Florida State Board of Administration and Massachusetts PRIM, allocated a total of $ 2.9 billion to three Thoma Bravo funds last year, according to a report commissioned by alternative investment technology provider Vidrio Financial. . Thoma Bravo had $ 78 billion in assets under management as of March 31.

“2020 has brought new challenges for beneficiaries looking for new options to tackle continued market volatility, cost pressure and the diversification of investments into alternative assets,” said Mazen Jabban, founder and CEO of Vidrio. Investors allocated $ 103 billion to alternatives over 600 different mandates last year, according to the report. Much of the money came in the second half of the year, after the worst of the economic downturn.

CVC Capital Partners’ private equity funds were the second most popular among the distributors included in the survey, raising $ 2.6 billion from eight pension funds. Oaktree Capital Management came in third, with $ 1.8 billion invested in three funds, while Clearlake Capital came in fourth, with $ 1.3 billion allocated to eight funds. Vista Equity Partners snatched $ 1.1 billion from investors, which went into six funds.

Overall, the pension funds surveyed invested $ 46 billion in private equity in 2020. Among the funds included in the dataset, CalSTRS had the highest allocation to private equity during the year. year, with $ 31 billion.

Allocations reflect the fortunes of companies under foreclosure

Investments by dispatchers reflected the pandemic’s toll on the economy and new sectors that thrived, people working from home and avoiding places of travel and entertainment.

“The role of the pandemic in strategy selection also cannot be ignored, as property managers have seen traction with unique logistics funds as consumers depend on home delivery of basic commodities, including l ‘grocery. REIT [Real Estate Investment Trusts] investing in grocery stores has proven to be popular, as have investments in laboratory real estate. The same goes for investments in studio space for streaming entertainment services, ”Vidrio found.

Vidrio also rated the real estate, private debt and hedge fund companies with the highest commitments in 2020.

Pension funds allocated a total of $ 28 billion to real assets in 2020, with Stonepeak Infrastructure Partners getting the highest allocation of $ 1.5 billion in total from five pension funds. PGIM pocketed $ 1.2 billion from two pension funds, the Massachusetts PRIM and the New York State Common Retirement Fund.

Private debt – which registered $ 20 billion inflows in 2020 – is one area that has exploded in recent years.

“Investing on credit with private institutions is not for those who cannot bear a certain illiquidity,” according to the report. “You have to be prepared to place a bet and let it unfold over a period of five to ten years. ”

In 2020, Ares Management received the highest private credit allocation of $ 1.3 billion from the Alaska Permanent Fund, Texas County & District Retirement System, and Virginia Retirement System combined.

Although hedge funds have had a few rough years, they are “back in the saddle,” the report said, with $ 9 billion in new mandates. The ever-popular Bridgewater Associates received the highest allocation for the year, with $ 900 million from the Oregon Investment Council. The fund was the largest hedge fund allocator in 2020, channeling a total of $ 1.4 billion to Bridgewater, quantitative manager FORT and GMO.

Vidrio has “seen many hedge fund managers turn to private investment, and conversely, there is also a history of investing in private managers that have gone public,” Jabban said. He expects the trend to continue.

“The mix of public and private investments will pose challenges for operational due diligence and risk management, and changes will need to be made so that organizations can take control of new opportunities and avoid getting bogged down in challenges. endless when it comes to data and technology, ”he said.



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