Orange County ERS Commits $280M to Alts; Terminates D.E. Shaw

The Orange County Employee Retirement System (OCERS) has shared commitments totaling up to $280 million across six alternative investments and terminated multi-asset fund manager, D.E. Shaw, according to November board meeting materials.

New Investments

$75 million was committed between two Quantum Energy funds. $64.3 million was committed to Quantum Energy Partners VIII, and $10.7 million was allocated to the Quantum Energy Partners VIII Co-Investment Fund. Quantum’s private equity funds invest in upstream oil and gas, energy transition and decarbonization investments, and in energy infrastructure assets.

$75 million was committed to EnCap Energy Transition Fund II. The infrastructure fund will focus on the decarbonization of the power sector in the U.S.

€50 million was committed to Altor Fund VI. The middle market buyout fund is managed by Altor Fund Manager AB based out of Sweden.

$50 million was committed to H.I.G. Middle Market LBO Fund IV. The buyout fund has a target size of $5 billion. Comparatively, Fund III closed in 2019 at $3.1 billion. 

€30 million was committed to Vitruvian Investment Partnership V. The middle market buyout fund is targeting €6.5 billion in capital commitments with a hard cap of €8 billion.

Manager Termination

OCERS terminated D.E. Shaw’s multi-asset fund. As of September 30, 2022, D.E. Shaw managed approximately $112.6 million for OCERS. The termination was due to the strategy no longer allowing existing clients to rebalance. OCERS previously approved new target weights for the risk mitigation allocation, so the decision was made to fully redeem the investment with D.E. Shaw. Investment consultant, Meketa, assisted with the termination recommendation. 

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