From: Reuters
Published January 9, 2008 11:06 AM

CalPERS buys minority stake in Silver Lake

PHILADELPHIA (Reuters) - Pension fund CalPERS said on Wednesday it acquired a 9.9 percent stake in Silver Lake, giving the technology-focused private equity firm money to expand globally and develop new investment funds.

The moved adds to other private equity investments by CalPERS, the California Public Employees' Retirement System, which owns a 10 percent stake in Apollo Management and a 5.5 percent stake in Carlyle Group.

CalPERS, which had been one of the limited partners in Silver Lake's first fund in 1999, also committed to making additional investments in Silver Lake. A representative from CalPERS, the biggest U.S. pension fund, will join Silver Lake's management advisory board.

Terms of the deal were not disclosed. The New York Times reported the value of the deal at $275 million, citing unnamed people briefed on the deal. The roughly 10 percent stake values all of Silver Lake at about $2.75 billion, the newspaper said.

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The investment from CalPERS will help Silver Lake expand internationally, create future funds and new alternative asset business opportunities, and allow Silver Lake to co-invest alongside its funds, said Silver Lake, which has about $16 billion in fund assets.

"As one of Silver Lake's earliest investors, we are excited to expand our relationship," said Leon Shahinian, senior investment officer of CalPERS Alternative Investment Management Group.

CalPERS recently announced it would raise its allocation to private equity to 10 percent from 6 percent of its assets, according to The Wall Street Journal.

The infusion of capital to the buyout group is distinct from money invested in the funds that Silver Lake raises to invest in other companies. Money raised by the funds must be returned to investors, while permanent capital can be used for the fund's operating budget.

In addition, CalPERS Alternative Investment Management Program has invested more than $40 billion in private equity funds. Since its inception in 1990, CalPERS Alternative Investment Management Program has generated more than $11 billion for CalPERS. The program's investments have included a Blackstone Group fund and the KKR Millennium Fund.

(Reporting by Swagata Gupta in Bangalore and Jessica Hall in Philadelphia; Editing by Steve Orlofsky and Dave Zimmerman)

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