On the related theory that those funds showing the least J-curves would be more likely to be heading for top-quartile performance, we took a deep dive into the performance numbers of Washington State Investment Board to pull out the most promising young funds.
Altogether we lined up, by IRR, 43 vintage-year 2011 to 2014 buyout, distressed debt, special situations, and growth equity funds backed by the state.
The winner? Silver Lake Partners IV LP, the $10.3 billion, vintage 2013 fund from technology specialist Silver Lake. It captured the top prize with a remarkable 71.56 percent IRR as of year-end 2014. The $90.5 million that Silver Lake had drawn down by that date was valued at $128.8 million, for a 1.4x investment multiple. Notably, less than $1 million of that has actually been returned to Washington in distributions.
In second place was TPG Capital’s TPG Growth II LP, a $2 billion, vintage-2011 pool earmarked for growth equity and related investments in fast-growing companies around the world, with an emphasis on India and China. As of year-end, the fund sported an IRR of 41.43 percent. It turned the $152.6 million drawn down from Washington into a total value of $232.0 million, for a 1.5x investment multiple. Distributions totaled $5.6 million.
Washington has one of the largest private equity portfolios in the country, valued at just under $18.3 billion as of year-end. Overall, the $39.1 billion drawn down by fund managers since 1983 has turned into $60.0 billion in total value, for a 1.5x investment multiple and an IRR of 13.25 percent.
|Top 10-performing young funds in Washington State portfolio, by IRR|
|Date of initial investment||Fund Name||Committed||Cash In||Cash Out||Value of Holdings||Total Value||Inv. Multiple||IRR|
|10/22/2013||Silver Lake Partners IV, L.P.||$400,000,000||$90,489,791||$379,909||$128,428,374||$128,808,283||1.4x||71.56%|
|12/23/2011||TPG Growth II, L.P.||$200,000,000||$152,564,419||$5,553,972||$226,429,730||$231,983,702||1.5x||41.43%|
|3/22/2013||Affinity Asia Pacific Fund IV, L.P.||$300,000,000||$77,861,428||$11,707,413||$83,285,159||$94,992,572||1.2x||36.03%|
|8/27/2012||Advent International GPE VII-B, L.P.||$400,000,000||$244,820,134||$18,400,389||$292,387,553||$310,787,942||1.3x||22.84%|
|4/2/2012||Vestar Capital Partners VI, L.P.||$158,637,500||$67,694,978||$20,098,441||$58,000,708||$78,099,149||1.2x||21.24%|
|2/24/2011||Fisher Lynch Co-Investment Partnership II, L.P.||$500,000,000||$280,089,310||$63,918,074||$355,710,706||$419,628,780||1.5x||20.30%|
|11/15/2012||KKR North America Fund XI, L.P.||$500,000,000||$279,496,516||33,401,024||$312,330,556||$345,731,580||1.2x||19.97%|
|5/24/2012||Warburg Pincus Private Equity XI, L.P.||$750,000,000||$430,125,612||$34,570,592||$502,398,561||$536,969,153||1.2x||19.94%|
|10/4/2013||KKR Asian Fund II, L.P.||$400,000,000||$143,034,096||$12,283,991||$147,423,575||$159,707,566||1.1x||19.45%|
|7/18/2011||GTCR Fund X, L.P.||$300,000,000||$259,399,634||$43,355,047||$338,630,453||$381,985,500||1.5x||19.44%|
|Source: Washington State Investment Board; data current as of December 31 2014; includes vintage years 2011-2014 in buyout, distressed debt, special situations and growth equity categories|