Return to search

LP Scorecard: HIG is Hot, J.C. Flowers Is Not for University of California

University of California has committed to some 207 venture capital and buyout-related funds. Of this, 112 are buyout funds ranging in performance from HIG Capital IV’s top internal rate of return (IRR) of 43.90 percent to J.C. Flowers II’s less impressive -19.70 percent (see rankings below).

Second-best buyout fund performer for the pension fund is the 2001 vintage Blackstone Capital Partners IV LP, posting an IRR of 37 percent, followed by the 2005 vintage Lindsay, Goldberg, & Bessemer LP, with a 33.8 percent IRR.

The bottom five performers of the selection include three 2006 offerings, a 2004 and a 2007 vintage. Coming before J.C. Flowers in second to last place is the 2006 vintage Perseus Partners VII LP, with an IRR of -17.60 percent. The third place from the bottom goes to the 2006 Terra Firma Capital Partners III LP, with an IRR of -13.20 percent.

The pension fund reports IRRs and multiples of those funds that are 2007 vintage and older. The below rankings highlight the top and bottom five performing buyout funds out of a selection of 72 buyout funds. The top-quartile IRR and multiple for that selection is 12.65 percent and 1.56x; the bottom quartile is 2.78 percent and 1.11x; and the median is 8.05 percent and 1.36x. This compares with a top quartile of 12.60 percent and 1.58x for the entire portfolio, bottom quartile of -0.05 per cent and 1.0x multiple, and median of 7.20 percent IRR and 1.32x multiple.The pension fund’s venture capital investments posted a top-quartile IRR and multiple of 12.15 percent and 1.58x, bottom-quartile IRR and multiple of -3.63 percent and 0.78x, and median IRR and multiple of 5.05 percent and 1.26x for the period.

Other prominent buyout firms the pension fund has committed to include Apollo Global Management, Bain Capital, Fortress, Madison Dearborn Capital Partners, Vestar Capital Partners and Windpoint Partners.

Since its inception in 1979 through December 31, 2012, the private equity portfolio has consisted of $8.5 billion in commitments with 207 active partnerships. As of December 31, $6.3 billion of these commitments have been called by the partnerships and $5.9 billion of distributions have been received. Including the current net asset value of $4.3 billion as of December 31, the private equity portfolio has produced $3.8 billion in profits and a 1.6x multiple on contributed capital. The portfolio has generated a total return of 11.7 percent for the 10-year period ended December 31.

TOP FIVE BUYOUT FUNDS

5. Golder, Thoma, Cressey, Rauner Fund IV LP

Vintage: 1993

Multiple: 2.12x

IRR: 25.70 percent

4. Golder, Thoma, Cressey Fund III

Vintage: 1987

Multiple: 5.59x

IRR: 31.1 percent

3. Lindsay, Goldberg, & Bessemer LP

Vintage: 2002

Multiple: 2.43x

IRR: 33.80 percent

2. Blackstone Capital Partners IV LP

Vintage: 2001

Multiple: 2.40x

IRR: 37.00 percent

1. HIG Capital IV

Vintage: 2006

Multiple: 2.00x

IRR: 43.90 percent

BOTTOM FIVE BUYOUT FUNDS

5. Segulah IV LP

Vintage: 2007

Multiple: 0.82x

IRR: -7.30 percent

4. Perseus 2000 Expansion Fund, LLC

Vintage: 2004

Multiple: 0.65x

IRR: -9.30 percent

3. Terra Firma Capital Partners III LP

Vintage: 2006

Multiple: 0.64x

IRR: -13.20 percent

2. Perseus Partners VII LP

Vintage: 2006

Multiple: 0.55x

IRR: – 17.60 percent

1. J.C. Flowers II LP

Vintage: 2006

Multiple: 0.37x

IRR: -19.70 percent