Investment in TPG Capital’s Dragon Co-Invest, L.P.

Memorandum to: State Investment Council
From: Corey Amon, Director
Subject: Investment in TPG Capital’s Dragon Co-Invest, L.P.

On October 29, 2019, the Division of Investment (the “Division”) invested $24 million in Dragon Co-Invest, L.P. (the “Fund”). This informational memorandum is presented to the State Investment Council (the “Council”) pursuant to N.J.A.C. 17:16-69.9. The attached schedule summarizes the details of the investment.

Division Staff undertook extensive due diligence on the proposed investment in accordance with the Division’s Alternative Investment Due Diligence Procedures. As part of its due diligence process, staff determined that the Fund has not engaged a third-party solicitor (“placement agent”).

Staff worked with representatives of the Division of Law and outside counsel to review and negotiated specific terms of the legal documents to govern the investment. A Disclosure Report of Political Contributions was obtained at the time of closing in accordance with the Council’s regulation governing political contributions (N.J.A.C. 17:16-4) and no political contributions were disclosed.

Note that the investment is authorized pursuant to Articles 69 and 90 of the Council’s regulations. Dragon Co-Invest, L.P. is considered a private equity buyout investment, as defined under N.J.A.C. 17:16-90.1. Pursuant to N.J.A.C. 17:16-90.4(a)1, the aggregate market value of private equity investments shall not exceed 12% of the combined assets of all of the Pension and Annuity Funds. As of the close of business on October 28, 2019, the aggregate market value of private equity investments was 11.24% of the combined assets of all the Pension and Annuity Funds excluding the Police and Fire Mortgage assets.

A formal report for the investment was provided to the Investment Policy Committee. In addition to the formal report, all other information obtained by the Division on the Investment was made available to the IPC.

We look forward to discussing the investment at the Council’s November 20, 2019 meeting.

Source: State of New Jersey State Investment Council