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 | ||||||||
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