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LP Scorecard: Washington’s Top Sponsors Coming Back To Market

Our latest LP Scorecard ranks the top ten performing predecessor vehicles by IRR within Washington State’s private equity portfolio as of June 30, 2012. There were 16 vehicles ranging from as mature as 1995 to as young as 2010 that qualified for this analysis based on Buyouts’s “Coming Back to Market” feature in the November 26, 2012, issue.

The 2000 vintage TPG Partners III LP is the top performer of this scorecard, having recorded an IRR of 24.51 percent and multiple of 4.58x from inception through June 30. Sister news service Reuters reported in November that TPG Capital is looking to raise between $8 billion and $12 billion for its next global buyout fund. TPG also takes third place with its 2003 vintage TPG Partners IV LP, which generated an IRR of 15.01 percent and 2.8x. The firm’s more recent funds, TPG Partners V LP and TPG Partners VI LP, didn’t quite make this top ten list, posting IRRs and multiples of 4.38 percent and 1.14x and 3.59 per cent and 1.26x respectively.

In second place comes the 1999 vintage KKR European Fund LP, which generated a 19.79 per cent IRR and 4.02x multiple for the period. Sponsor Kohlberg Kravis Roberts & Co. also took ninth place with its most recent European fund, KKR European Fund III LP, which posted an IRR of 6.14 percent and multiple of 1.03x. KKR is predicted to come back to market this year with KKR European Fund IV, according to Buyouts.

Distressed funds are also prominent in the top ten list with Avenue Capital Group taking fourth and seventh place with Avenue Special Situations Fund V LP and Avenue Special Situations Fund IV LP, which recorded IRRs and multiples of 11.18 percent and 2.51x and 8.08 percent and 2.54x, respectively. The firm is expected by Buyouts to be back in the market with Avenue Special Situations Fund VII this year.

Oaktree Capital Management’s 2010 vintage Oaktree Principal Fund V LP, which recorded an IRR of 6.45 percent and multiple of 1.11x and its 2006 vintage OCM Principal Opportunities Fund IV LP, with a 5.63 percent IRR and 1.6x multiple, take eight and tenth place respectively. Other firms to feature in this top ten include BV Investment Partners and Clayton, Dubilier & Rice.

All told, Buyouts identified nearly 60 private equity firms likely to launch new funds in 2013, based primarily on how much their previous funds have been drawn down. The $84 billion Washington State Investment Board is invested in 57 funds managed by firms coming back to market with a vehicle this year and, of those, 16 are predecessor vehicles of those predicted to come to market this year.

Washington State is invested in some 267 private equity funds, including buyouts, distressed debt, growth equity, mezzanine, special situations and venture capital. Top performers by IRR for the entire portfolio include the 1997 Menlo Ventures VII LP in pole position, recording an IRR of 135.58 percent and multiple of 9.42x. This is followed by an extremely young 2012 vintage global mid-market fund Actis Global 4 LP, which posts an IRR of 86.93 per cent and multiple of 0.65x for the period. In third place comes the successful 2001 GTCR Fund VIIA LP, which posted an IRR of 83.01 percent and multiple of 5.58x for the period.

Angela Sormani is a special correspondent for Buyouts in London.

10. OCM Principal Opportunities Fund IV LP

Fund Type: Distressed Debt

Vintage: 2006

Multiple: 1.6x

IRR: 5.63 percent

Probable Name of Fund Coming Back to Market: Oaktree Principal Fund VI

 

9. KKR European Fund III LP

Fund Type: Corporate Finance/Buyout Large

Vintage: 2008

Multiple: 1.03x

IRR: 6.14 percent

Probable Name of Fund Coming Back to Market: KKR European Fund IV LP

 

8. Oaktree Principal Fund V LP

Fund Type: Distressed

Vintage: 2010

Multiple: 1.11x

IRR: 6.45 percent

Probable Name of Fund Coming Back to Market: Oaktree Principal Fund VI

 

7. Avenue Special Situations Fund IV LP

Fund Type: Distressed

Vintage: 2006

Multiple: 2.54x

IRR: 8.08 percent

Probable Name of Fund Coming Back to Market: Avenue Special Situations Fund VII

 

6. Clayton, Dubilier & Rice Fund VI LP

Fund Type: Corporate Finance/Buyout Large

Vintage: 1998

Multiple: 2.79x

IRR: 9.31 percent

Probable Name of Fund Coming Back to Market: Clayton, Dubilier & Rice Fund IX LP

 

5. Boston Ventures VI LP

Fund Type: Growth Equity

Vintage: 2000

Multiple: 2.8x

IRR: 9.87 percent

Probable Name of Fund Coming Back to Market: Boston Ventures VIII

 

4. Avenue Special Situations Fund V LP

Fund Type: Distressed

Vintage: 2007

Multiple: 2.51x

IRR: 11.18 percent

Probable Name of Fund Coming Back to Market: Avenue Special Situations Fund VII

 

3. TPG Partners IV LP

Fund Type: Corporate Finance/Buyout Large

Vintage: 2003

Multiple: 2.8x

IRR: 15.01 percent

Probable Name of Fund Coming Back to Market: TPG Capital Partners VII LP

 

2. KKR European Fund LP

Fund Type: Corporate Finance/Buyout Large

Vintage: 1999

Multiple: 4.02x

IRR: 19.79 percent

Probable Name of Fund Coming Back to Market: KKR European Fund IV LP

 

1. TPG Partners III LP

Fund Type: Corporate Finance/Buyout Large

Vintage: 2000

Multiple: 4.58x

IRR: 24.51 percent

Probable Name of Fund Coming Back to Market: TPG Capital Partners VII LP