FROM: Don Pierce, Chief Investment Officer
SUBJECT: Informational: 2026 Private Equity Pacing Plan Update
RECOMMENDATION:
title
2026 Private Equity Pacing Plan Update.
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BACKGROUND:
The SBCERA Board of Retirement approved the 2026 Private Equity (“PE”) Pacing Plan in January with a budget of $735 million, consisting of an allocation of $315 million to existing MCA relationships, and $420 million of dry powder.
SBCERA Budget Update
In May, an MCA relationship with Drive Capital was established for $200 million with an allocation of $100 million from the 2026 budget and the balance to be allocated to future budgets. The Industry Ventures MCA budget was increased by $50 million to facilitate two transactions - (i) a $75 million commitment to Industry Ventures Secondary Fund XI and (ii) a $20 million commitment to Lone View Capital Fund II. A breakdown of the updated 2026 PE Pacing Plan is provided in Table 1.
Through June 2026, the investment team reviewed 53 transactions in private equity and approved 11 transactions committing $286 million across primary funds, co-investments, and secondary transactions. Exhibit A provides additional information on PE deal activity for our MCA relationships for the year.
Since 2020, the private equity program budget has averaged $620 million with an average yearly commitment of $457 million to various opportunities. Annual distributions from PE investments have averaged $338 million from 2020 to 2025. Distributions in 2026 are $116 million as of May 31, 2026.
Since inception in 2004, SBCERA’s PE allocation has generated a net 10.5% IRR and 1.61x multiple on $5.5 billion of commitments as of Q3 2025. For the same period SBCERA has received distributions of $4.6 billion, or a DPI of 0.96x.
The NEPC pacing plan presentation is included as Exhibit B for ease of reference; however, the same report was provided to the Board in January.
Table 1: Private Equity Budget and Allocations for 2024-2026
|
Manager Allocations |
2024 |
2025 |
2026 |
|
|
|
|
Base |
Add |
|
Total PE Budget |
$575 MM |
$650 MM |
$735 MM |
|
|
Adams Street Partners MCA |
$75 MM |
$75 MM |
$50 MM |
|
|
Adams Street Partners Headwaters Fund |
- |
$65 MM |
$65 MM |
|
|
Drive Capital MCA |
- |
- |
- |
$100 MM |
|
Industry Ventures MCA |
$50 MM |
$50 MM |
$50 MM |
$50 MM |
|
Kayne Anderson MCA |
- |
- |
- |
|
|
Partners Group MCA |
$75 MM |
$225 MM |
$75 MM |
|
|
Pathway Capital MCA |
$100 MM |
$75 MM |
$75 MM |
|
|
Patria Co-Invest Partnership Fund I |
- |
$86 MM |
- |
|
|
Patria SOF V |
$75 MM |
$25 MM |
- |
|
|
Allocated PE Budget |
$375 MM |
$601 MM |
$315 MM |
$465 MM |
|
Unallocated PE Budget |
$200 MM |
$49 MM |
$420 MM |
$270 MM |
Table 2: SBCERA MCA & Strategic Partnership Net Performance as of 12/31/2025:
|
|
Since Inception (net) |
|
|
Manager |
IRR |
Multiple |
DPI |
NAV ($ Million) |
|
Adams Street Partners Fund 1 (MCA) Inception: 9/2020 |
11.7% |
1.45x |
0.32x |
$162 |
|
Adams Street Partners Fund 2 (MCA) Inception: 9/2023 |
22.7% |
1.31x |
0.00x |
$91 |
|
Ares MCA Inception: 1/2014 |
8.6% |
2.92x |
0.98x |
$702 |
|
Industry Ventures MCA Inception: 9/2013 |
16.8% |
1.70x |
0.63x |
$623 |
|
Kayne Anderson MCA Inception: 9/2017 |
12.4% |
1.36x |
0.69x |
$508 |
|
Partners Group MCA Inception: 6/2013 |
14.5% |
1.58x |
0.60x |
$895 |
|
Pathway Capital MCA Inception: 3/2014 |
17.8% |
1.70x |
0.70x |
$739 |
|
Patria SOF Strategy Inception:7/2013 |
17.4% |
1.60x |
1.20x |
$57 |
|
Waterfall MCA Inception:11/2018 |
17.1% |
1.83x |
1.27x |
$62 |
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Amit Thanki
ATTACHMENTS:
Exhibit A: PE MCA Deal Flow - YTD 2026
Exhibit B: NEPC 2026 PE Pacing Plan