In June, the state pension fund made its premier pledge to private equity with a slug of $30 million going to mega-fund Hellman & Friedman Capital Partners VII.
In the coming year, the limited partner will likely commit between $100 million and $200 million to the asset class, says Andrew Sawyer, CIO for the $8 billion state pension fund.
The intent is to invest across a broad array of strategies, including buyouts, distressed, mezzanine funds and possibly venture capital. The investments will be allocated based on “deal flow and our interest in those deals,” Sawyer says.
In March 2009, the pension fund hired Marina del Rey, Calif.-based
Maine does not have a strict definition of “young secondaries,” says Sawyer, who notes that it generally refers to buying stakes in funds in which capital commitments are not completely drawn down.
“Our definition is intentionally broad,” he says. The Cliffwater mandate is in addition to the $100 million to $200 million that might be committed in the coming year.
Sawyer, who joined the pension fund in February 2008, helped to develop the private equity program, which has a 5% target allocation. He hopes to reach that goal in three to four years. —Nancy Gordon
Fort Washington hits market again
It’s not clear what the target is for the new fund, but the previous one closed in May with about $170 million, and the firm’s fifth fund closed in 2006 with $135 million.
The Cincinnati Retirement System recently pledged $10 million to Fort Washington Private Equity Investors VII. Thompson Hine is the firm’s legal adviser.
The firm is particularly interested in vehicles that can take advantage of distress in the market, such as turnarounds, restructurings and secondaries, Christopher Baucom, managing director, private equity, for Fort Washington, previously said.
Fort Washington commits to funds as small as $200 million and as large as $6 billion, but it tends to favor smaller vehicles, writing checks of $5 million to $10 million per fund. The firm has previously committed to buyout shops ABRY Partners, The Carlyle Group, Fenway Partners, Flexpoint Ford and Great Hill Equity Partners; to venture firms Draper Fisher Jurvetson and Shasta Ventures; and to distressed investor HIG Bayside.
Fort Washington Capital’s backers are a mix of public pensions, insurance companies, endowments and foundations. Insurance company Western & Southern, which is the firm’s parent, is Fort Washington’s main investor. Procter & Gamble Co. and Fifth Third Bancorp are also investors.
Fort Washington Capital manages or advises about a dozen private equity funds of funds and six customized programs, including ones for the states of Kentucky, New Mexico, Ohio and Utah.
In 2008, it purchased the fund-of-funds business of Cleveland-based Peppertree Partners. —Nancy Gordon