Meet the new LP calling the shots in Connecticut

Fundraising GPs should add a new name to their Rolodex: Shawn Wooden, Connecticut’s Treasurer-elect who defeated Republican Thad Gray Nov. 6.

Connecticut gives its treasurer final say on investment decisions, making it one of the last states to leave that power in the hands of a single person, as opposed to a board. So Wooden, like predecessor Denise Nappier, will be a major player in the LP world. The treasurer is aided in investment vetting by the Investment Advisory Council.

The $30 billion Connecticut Retirement Plans and Trust Fund (CRPTF), which consists of six state pension funds and nine trust funds, has lots of room to grow its private equity portfolio. Its PE target is 11 percent, but its allocation currently sits at just 7.5 percent.

Wooden succeeds Nappier, who is retiring after 20 years. She was the first black woman to be elected a state treasurer in the U.S.

Even better from a GP’s perspective, Wooden is no stranger to private equity. He is an attorney at law firm Day Pitney working on pension-plan investments. In his role, Wooden has advised public pensions on transactions involving private equity, venture capital, infrastructure, energy and other asset classes, according to the law firm’s website.

Wooden also negotiated strategic partner joint ventures, co-investments and side letter agreements, the website said.

Before you get too excited, keep in mind that it’s early days and Wooden’s plans on asset allocation and selection are not yet known.

However, Wooden saw the treasurer’s job as being much more than the state’s chief stock-picker, according to his campaign website.

“The office has a duty to maximize investment returns and minimize risk to the pension funds. But I strongly believe the treasurer’s investments should reflect and execute our shared priorities to move our state forward,” he said on the website.

Wooden’s campaign did not answer messages left by Buyouts.

Wooden defeated Republican Gray, who previously worked as CIO at private equity fund-of-funds Abbott Capital Management. Abbott manages PE investments on behalf of public pension systems and other institutional investors.

Connecticut is not an investor with Abbott.

Connecticut pension’s PE portfolio

Connecticut pension system’s PE portfolio has produced an internal rate of return of 9.2 percent since inception in 1985, as of June 30, 2018.

The private equity portfolio includes Connecticut-focused investments through Connecticut Horizon Fund and its in-state PE program.

Founded in 2005, Connecticut Horizon Fund focuses on emerging, minority-owned, women-owned and Connecticut-based private equity firms. Horizon allocated $190 million through two funds managed by Muller & Monroe Capital Management and two funds managed by J.P. Morgan Asset Management, according to a StepStone report dated June 30.

Commitments from these funds included Connecticut-based Altus Capital Partners, Atlantic Street Capital, Clearview Capital, Mill Road Capital, North Castle Partners and Southfield Capital.

Commitments were also made to African-American-owned firms Brightwood Capital, Capital Point Partners and Siris Partners, and Hispanic-owned firms Estancia Capital Partners and Hispania Private Equity.

In addition, the pension system committed $145 million to Connecticut-based companies through three private equity funds from its in-state PE program initiated in 2015.

Overall, Connecticut’s private investments are spread across the following strategies: buyouts (49.6 percent), venture capital (18.2 percent), distressed (8.1 percent), fund-of-funds (8 percent), mezzanine (7.1 percent), secondaries (5.1 percent),  multi-strategy (2.7 percent) and growth (1.2 percent).

Of these, middle-market buyouts returned 15.6 percent, the highest among all strategies as of June 30. Distressed investments returned 13.7 percent, large buyouts returned 11.6 percent, small buyouts returned 11.3 percent and balanced stage venture returned 11 percent, as of June 30, documents said.

Action Item: Wooden’s email at Day Pitney is stwooden@daypitney.com. His Connecticut office number is (860) 275 0157 and his New York office is (212) 297 2471.