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LP Scorecard: Latin America gives Washington highest IRR boost

The Latin American, mid-market focused buyout vehicle Southern Cross Fund IV was up 24.87 percentage points to a positive IRR of 1.69 percent in 2013 from -23.18 percent in 2012. That fund posted the greatest IRR percentage point increase improvement out of a selection of some 182 buyout-related vehicles of vintages 2010 and older in the Washington State portfolio.

The top four percentage point increases for the period were 2010 vintage funds. In second place came growth equity fund TA I LP, up 7.51 percentage points to 14.82 percent in 2013 from 7.31 percent in 2012. In third place was mid-market buyout fund CDH Fund IV LP, up 6.48 percentage points to come out of negative territory to an IRR of 0.36 percent in 2013 from an IRR of -6.12 percent in 2012.

Another 2010 vintage Latin American buyout fund landed in fourth place — Advent Latin American Private Equity Fund V LP, up 6.47 percentage points to 5.14 percent in 2013 coming out from a negative IRR -1.33 percent in 2012.

Three 2008 vintage large buyout-focused European funds made an appearance in this top ten. They are KKR European Fund III LP in fifth place, up 6.28 percentage points to 4.13 percent in 2013 from a negative -2.15 percent in 2012; Bridgepoint Europe IV LP in seventh place, up 5.45 percentage points to an IRR of 10.08 percent in 2013 from a 4.63 percent IRR in 2012; and Nordic Capital Fund VII LP, up 5.09 percentage points to a 6.33 percent IRR in 2013 from 1.24 percent in 2012.

Most recently, Washington joined the Oregon Public Employees Retirement Fund as a major limited partner in an interim fund being raised by TPG Capital before it launches its next flagship vehicle, Buyouts reported last month. Washington approved a $600 million commitment to the TPG Capital Strategic Partners Account. Washington has committed more than $2 billion to seven TPG-sponsored investment vehicles, including $200 million to TPG Opportunity Partners (TOP) III last year, $200 million to TOP II in 2012 and $200 million to TPG Growth II in 2011.

Washington State’s private equity portfolio has generated an IRR of 13.18 percent for the period with a multiple of 1.5x. The state pension fund has committed some $40.8 billion to the asset class to date.