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LP Scorecard: Oregon’s Top and Bottom Five Buyout Performers

The top-performing investment fund from Providence Equity posted an IRR of 78.5 percent and an investment multiple of 3.32x as of year-end. Other high flyers for the council, which runs the roughly $60 billion Oregon Public Employees Retirement Fund, included the 2001 vintage energy-focused First Reserve Fund IX, which came in second place with a 48.1 percent IRR and 3x multiple; and the 2002 vintage distressed debt fund OCM Opportunities Fund IVb, which produced a 46.5 percent IRR and 2.26x investment multiple.

Not doing so well for the state pension fund is the 2006 vintage J.C. Flowers II, which generated a -19.6 percent IRR and 0.4x multiple as of Dec. 31. This is followed by another 2006 fund, Terra Firma Capital Partners III, which produced a -15.6 percent IRR and 0.58x multiple; and the 1998 TSG Capital Fund II, in third from last place with a -13.4 percent IRR and 0.53x multiple. We were unable to reach firms in the bottom five for comment.

Altogether, Oregon Investment Council has committed to some 274 private equity funds, with vintages ranging from 1981 to 2012 and including buyout, funds of funds, secondaries, special situations and venture capital offerings. The state pension fund does not provide IRRs for those funds in its portfolio of 2010 vintage and younger.

The state pension’s total commitments to private equity rose slightly from $31.3 billion the previous quarter to $31.4 billion as of Dec. 31, 2012, and this year it has so far made commitments to seven funds including HarbourVest Partners 2012 Direct Fund; KKR Asian Fund II; Mayfield XIV; Nordic Capital VIII; Oaktree Opportunities Fund IX; Pathway Private Equity Fund III and Pine Brook Capital Partners II. The total value of private equity assets was down from $14.9 billion the previous quarter to $14.6 billion in the fourth quarter.

The entire private equity portfolio had generated an IRR of 15.8 percent and multiple of 1.55x as of year-end. The pension fund’s top-quartile IRR was down slightly from the previous quarter’s 17.9 percent to 17.4 percent and the top-quartile multiple was up slightly from 1.67x to 1.70x; bottom-quartile IRR and multiple were both up from 3.4 percent to 4.5 percent and 1.01x to 1.07x; and median IRR and multiple for the fourth quarter were also both up on the last quarter from 9.6 percent to 9.9 percent and 1.27x to 1.32x for the period.

Top Five Oregon Performers

5. CVC European Equity Partners III
Vintage: 2001
Multiple: 2.85x
IRR: 41.4 percent

4. Doughty Hanson Fund II
Vintage: 1995
Multiple: 2.1x
IRR: 45.6 percent

3. OCM Opportunities Fund IVb
Vintage: 2002
Multiple: 2.26x
IRR: 46.5 percent

2. First Reserve Fund IX
Vintage: 2001
Multiple: 3x
IRR: 48.1 percent

1. Providence Equity Partners
Vintage: 1996
Multiple: 3.32x
IRR: 78.5 percent

Bottom Five Oregon Performers

5. BCI Growth V
Vintage: 1999
Multiple: 0.49x
IRR: -9.5 percent

4. Terra Firma Capital Partners III
Vintage: 2006
Multiple: 0.68x
IRR: -11 percent

3. Exxel Capital Partners VI
Vintage: 2000
Multiple: 0.39x
IRR: -11 percent

2. TSG Capital Fund III
Vintage: 1998
Multiple: 0.53x
IRR: -13.4 percent

1. J.C. Flowers II
Vintage: 2006
Multiple: 0.4x
IRR: -19.6 percent