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LP Scorecard: These 10 young funds are off to a fast start for Washington State

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