Oregon Investment Council, Tigard, which runs the $69.7 billion Oregon Public Employees Retirement Fund, committed up to $500 million to KKR Americas Fund XII, a private equity fund managed by KKR & Co., and $400 million to Global Infrastructure Partners III, with both commitments contingent on negotiation of terms and legal approval, spokesman James Sinks said in an e-mail.
The KKR fund has a $10 billion target, with KKR expecting to commit $700 million. The new fund is expected to make about 25 investments of $350 million to $500 million in companies with enterprise values of $500 million to $2 billion, according to agenda materials for the council's Wednesday meeting. Fund officials will invest primarily in North America with some deals in Latin America “on an opportunistic basis” and “toe-hold investments in public equities,” a memo in the agenda materials stated.
The council has been investing with KKR since 1981.
Global Infrastructure Partners' new fund has a $12.5 billion target and a $15 billion hard cap. Fund officials expect to hold a first close on Dec. 15. Fund officials expect to make 10 to 14 equity investments in infrastructure. To date, 80% of its equity investments in infrastructure projects have been through joint ventures. Oregon has been investing with Global Infrastructure Partners since 2011.
Separately, the council shifted the focus of its $7.93 billion real estate allocation to emphasize current income over capital appreciation. The council could approve changing the portfolio as early as its Feb. 3 meeting, increasing the policy target to core to 60% from 30% of the portfolio and reducing leverage of the core portfolio to 45% loan-to-value from 50% loan-to-value of the property. Core would now also include the REITs target. The council would also retain its 20% allocation to value-added but drop any criteria based on internal rate of return and loan-to-value targets. Opportunistic real estate would be reduced to 20% from 30% of the real estate portfolio.