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LP Scorecard: Carlyle Japan A Top Asian Fund For CalPERS

Prominent exited investments from that fund include security service company Asahi Security, acquired by The Carlyle Group in February 2002; healthcare company Colin Medical Technology Corporation, acquired in December 2003; and Kito, a manufacturer of hoists and cranes which was acquired in September 2003. A Carlyle Group spokesperson declined to comment on the returns of these exits.

Since inception in 1990 to March 31, 2012, the CalPERS private equity program has generated $20.7 billion in profits for the pension fund. The pension fund has a target allocation of 14 percent, as of July 2011, and an actual allocation of 14 percent (actual investment $33.5 billion) percent as of August 31, 2012.

Altogether CalPERS has backed some 277 funds spanning vintages 1991 to 2012, showcasing an extremely diversified and sophisticated portfolio. According to CalPERS, investments can be in any industry or geography and may include buyouts or corporate restructuring; expansion capital; venture capital; credit related and opportunistic investments. The pension fund also has exposure to the asset class through various funds of funds. Within its private equity portfolio the sub-asset class allocation targets are as follows: buyouts 60 percent; credit-related 15 percent; venture capital 1 percent; growth/expansion 15 percent; opportunistic 10 percent.

Prominent global private equity fund managers backed by CalPERS include Apollo Global Management, Blackstone, Carlyle Group, Coller Capital, Kohlberg Kravis Roberts & Co., Lexington Partners and TPG. Among the pension fund’s European offerings are funds from Bridgepoint Capital, Candover (now Arle Capital) CVC Capital Partners and Permira. Venture capital fund managers that CalPERS has backed include Insight Venture Partners; Khosla Ventures and Pinnacle Ventures. The pension fund is also exposed to venture through its California Emerging Ventures funds I,II, II and IV vehicles, all captive funds of funds.

Our latest LP scorecard shows the performance of the top 10 Asian funds in the CalPERS portfolio. The top ten spans vintages from 2000 to 2008, with Carlyle Group taking three of the top ten slots with two buyout-focused funds (Carlyle Japan Partners I LP and Carlyle Asia Partners (PV II) LP) and a venture-focused vehicle (Carlyle Asia Venture Partners II LP). TPG’s Newbridge Asia III LP and Newbridge Asia IV LP come in second and third place respectively.

CalPERS also has exposure to Asia funds through its commitment to 57 Stars Global Opportunities Fund I and II. Within those portfolios the fund is committed to vehicles such as the China-focused 2009 vintage New Horizon Capital III LP, which has generated an IRR of 24.5 percent as of March 31, 2012; the 2007 Navis Asia Fund V LP, which posts a 10.5 percent IRR; the 2007 Baring Asia Private Equity Fund IV LP, which has generated an IRR of 8.4 percent; and China’s Hony Capital Fund 2008, LP which has generated an IRR of 6.7 percent for the period.

Below are the top-performing Asian investments, excluding those made through funds of funds.

 

10. Granite Global Ventures III, LP
Vintage: 2006
CalPERS Commitment: $60 million
Multiple: 1.3x
IRR: 10.4 percent

9. Affinity Asia Pacific Fund III, LP
Vintage: 2007
CalPERS Commitment: $150 million
Multiple: 1.3x
IRR: 11.1 percent

8. KKR Asian Fund, LP
Vintage: 2007
CalPERS Commitment: $275 million
Multiple: 1.4x
IRR: 13.6 percent

7. SAIF Partners III LP
Vintage: 2007
CalPERS Commitment: $100 million
Multiple: 1.6x
IRR: 14.3 percent

6. Carlyle Asia Venture Partners II LP
Vintage: 2001
CalPERS Commitment: $42.5 million
Multiple: 2x
IRR: 17.6 percent

5. Carlyle Asia Partners (PV II) LP
Vintage: 2000
CalPERS Commitment: $75 million
Multiple: 2.7x
IRR: 18.3 percent

4. Asia Alternatives Capital Partners II LP
Vintage: 2008
CalPERS Commitment: $200 million
Multiple: 1.3x
IRR: 19.5 percent

3. Newbridge Asia IV LP
Vintage: 2005
CalPERS Commitment: $180 million
Multiple: 2.1x
IRR: 20.5 percent

2. Newbridge Asia III LP
Vintage: 2003
CalPERS Commitment: $75 million
Multiple: 4.4x
IRR: 30.8 percent

1. Carlyle Japan Partners I LP

Vintage: 2001
CalPERS Commitment: $26.5 million
Multiple: 2.2x
IRR: 34 percent