Adams Street scores $60 mln from North Dakota for new fund-of-funds

  • New Adams Street fund targets returns of 13 pct-plus
  • Growth-oriented firms like Accel-KKR, Altamont highlighted
  • North Dakota held 3.2 pct of assets in PE

North Dakota’s State Investment Board re-upped for as much as $60 million to Adams Street Partners new global fund-of-funds, Executive Director and CIO Dave Hunter told Buyouts.

The board, which oversees the state’s pension and investment assets, approved the commitment unanimously at its Aug. 25 meeting.

Adams Street’s presentation name-checked firms like Accel-KKRAltamont Capital Partners and Boyu Capital as the types of managers it will pursue with its new vehicle. The fund’s primary investments will target vehicles specializing in high-growth sectors, or industries undergoing dramatic shifts, including software/technology, engineering and manufacturing, consumer products and healthcare, according to the presentation.

A portion of the fund’s investment capital will go toward acquiring stakes in older private equity funds through the secondary market, which should hasten returns for North Dakota and other investors. Adams Street’s secondary portfolio includes stakes in funds managed by firms like ABRY PartnersCVC Capital Partners and Summit Partners, according to a presentation.

Adams Street is the longest-tenured PE manager for North Dakota’s $5.3 billion pension system, an investment memo says. North Dakota’s investments with Adams Street were valued at roughly $39 million and netting an internal rate of return of 10.96 percent, the firm’s presentation shows.

The fund is targeting a net return exceeding 13 percent and will charge North Dakota a 0.49 percent management fee on its commitment.

North Dakota held roughly 3.2 percent of its assets in PE as of June 30. The portfolio was valued at roughly $167 million as of that date.

Action Item: More on North Dakota’s investment program: