FROM: Don Pierce, Chief Investment Officer
SUBJECT: Informational: 2026 Private Equity Pacing Plan Update
RECOMMENDATION:
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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
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