FROM: Don Pierce, Chief Investment Officer
SUBJECT: Informational: Pathway Capital Manager Update
RECOMMENDATION:
title
Pathway Capital 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 $90 billion in private equity, credit, and infrastructure investments.
SBCERA committed to Pathway Private Equity Fund VII (“PPEF VII”) in with an initial commitment of $604 million in January 2004. PPEV VII invested $906 million in 73 primary fund commitments from 2004 through 2013 and has generated a net 1.72x DPI, 1.92x TVPI and 12.7% IRR as of June 30, 2023. Net asset value is $192.7 million.
In December 2013, SBCERA and PCM entered into an evergreen MCA agreement with an initial commitment of $280 million. The relationship has since committed $894.4 million to 155 investments across primary, co-investments, secondary transactions. Through June 30, 2023, the MCA structure has generated a net 0.71x DPI, 1.72X TVPI, and 21.8% IRR. Net asset value is $614.9 million.
Private Equity continues to be an important asset class for SBCERA target allocation of 18% and an expected return of 9.2% over a 10-year period. SBCERA’s private equity budget for 2023 is $525 million including an allocation of $75 million to PCM.
BUDGET IMPACT:
Investment Costs are deducted from Net Asset Value.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Amit Thanki
ATTACHMENTS:
Exhibit A: Pathway Capital Presentation