San Francisco Makes $1.1 Billion in Commitments, Mostly to Hedge Funds

Private equity, real estate, and natural resources funds also represented.

The $25.5 billion San Francisco Employees’ Retirement System has committed more than $1.1 billion to hedge funds, private equity, real estate, and natural resources funds, shows a SFERS report.

All the manager commitments were approved by the retirement system’s board in closed session. Three of the manager commitments were approved at the board’s meeting on August 8, three at its June 13 meeting, and one each at its April 11 and March 14 meetings, show a report of closed session actions reviewed by CIO.

The biggest commitments were made to hedge funds. At the August SFERS board meeting, the report shows that $300 million was committed to ExodusPoint Partners Fund, a multi-strategy hedge fund, managed by Exodus Point Capital Partners.

Another commitment of $200 million was made to another hedge fund, East Lodge Capital Credit Opportunities Fund, at the board’s June meeting. An additional $25 million was made as a special investment in the East Lodge Credit Capital Partnership, the report said. The funds are managed by East Lodge Capital.

At the April 11 meeting, $300 million was committed to two hedge funds: Solus Long-Term Opportunities Evergreen Fund and the Solus Series Domestic Fund. The hedge funds invest in distress debt and are managed by Solus Alternative Asset Management.

SFERS’s hedge fund portfolio totaled $3.1 billion as of August 31, shows SFERS data. The pensions system has been actively building its hedge fund portfolio since the board approved investing in the vehicles at its February 2015 meeting. The vote followed several years of controversy as divided board members split on Chief Investment Officer William Coaker Jr.’s plan to build a hedge fund portfolio.

Outside of hedge funds, the board at its August 8 meeting approved a $100 million commitment to GGV Capital VII, GGV Capital VII Plus, and GGV Discovery, three venture capital funds. The funds’ overall manager is GGV Capital.

Also at the August meeting, the board approved commitments of $15 million to Level Equity Growth Partners and $10 million in Level Equity Opportunities Fund. The two funds are considered growth equity funds within the SFERS $4.4 billion private equity portfolio. The funds are managed by Level Equity.

At its meeting on June 13, the board approved $50 million to Asian real estate manager’s Pamfleet Real Estate Fund III. At the same meeting, the board approved a commitment of $30 million to the Polaris Growth Fund I, managed by Polaris Partners. The investment is classified as a growth capital investment within the SFERS private equity portfolio.

At the March 14 meeting, the retirement board approved an investment of $100 million in Blackstone Energy Partners III. The Blackstone fund is classified as a natural resource investment.

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