FROM: Don Pierce, Chief Investment Officer
SUBJECT: Informational: Pathway Capital Management Manager Update
RECOMMENDATION:
title
Pathway Capital Management Manager Update.
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BACKGROUND:
Pathway Capital Management (“PCM”) is a private assets manager based in Irvine, California. Founded in 1991 with a focus in private equity, PCM currently manages about $65 billion in private equity, credit, and infrastructure investments.
SBCERA’s relationship with PCM started in January 2004 with an initial commitment of $604 million (total commitment of $906 million) to a fund-of-one vehicle called Pathway Private Equity Fund VII (“PPEFVII”). PPEF VII has generated a net 11.2% IRR and 1.8x TVPI since inception. In December 2013, SBCERA and PCM entered into an evergreen MCA agreement with an initial commitment of $280 million (total commitment $500 million). Since inception the Pathway MCA has generated a net 19.4% IRR and 1.8x TVPI.
Private Equity is an important source of investment return in the SBCERA portfolio with a target allocation of 16% and according to NEPC’s return projections an expected return of 10.9% over a 10-year period. SBCERA’s private equity budget for 2020 is $600 million including an allocation of $70 million to PCM.
COMMITTEE REVIEW:
This item was reviewed by the Investment Committee at its November 17, 2020 meeting.
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Amit Thanki
ATTACHMENTS:
Exhibit A: Pathway Capital Management Presentation