- Why this is important: Minnesota SBI continues torrid commitment pace, making it one of the most active pension LPs
- Assets under management: $93.5 bln
Minnesota State Board of Investment re-upped $1.23 billion in commitments to seven private equity managers and will look to invest in BlackRock’s long-term PE fund.
The $93.5 billion SBI manages investments of retirement funds, trust funds and cash accounts for the state.
The combined funds that include Teachers Retirement Fund, Public Employees Retirement Association and Minnesota State Retirement System have a private-markets allocation of 20 percent.
The combined funds were valued at $67.8 billion, of which the private-markets allocation was $16.05 billion, as of March 31, 2018, documents received by Buyout show. Private markets include private credit, real assets, real estate and distressed/opportunistic strategies.
PE makes up more than half of Minnesota SBI’s private-markets allocation and accounted for 9.18 percent of the total fund as of March 31.
The seven PE firms that received re-ups were Brookfield Capital Partners, Warburg Pincus, Welsh, Carson, Anderson & Stowe, Paine Schwartz Partners, Thoma Bravo, Goldman Sachs and Goldner Hawn.
Minnesota SBI committed $250 million to Brookfield Capital’s fifth fund, which is targeting $7 billion.
The fund will invest in companies in out-of-favor sectors across the U.S., Canada, Western Europe, Australia, Brazil and India. It will target 14 to 17 investments of $200 million to $600 million and will invest in one or two larger opportunistic transactions, pension documents said.
Minnesota SBI previously invested $100 million in Brookfield’s fourth fund, which raised $4 billion.
The SBI committed $250 million to Warburg Pincus’s global growth fund, which is expected to raise $13.5 billion in commitments. The fund will invest in growth companies, from early-stage and startups to later-stage buyouts and special situations.
Warburg will aim to create a portfolio of 60 to 90 companies with an average equity investment of $150 million. A majority of the fund will be invested in the U.S. followed by Asia and Europe, pension documents said.
Minnesota SBI has invested $966 million in Warburg’s nine previous funds, documents said.
The pension fund committed $250 million to WCAS’s 13th fund, which is expected to raise $3.75 billion in commitments. The firm is focused on technology and healthcare.
The GPs and other partners are expected to commit $200 million, or 5 percent, in this fund, the documents said.
Minnesota SBI invested $675 million in WCAS’s five previous funds.
And the pension fund committed $150 million to Thoma Bravo’s 13th fund, which is expected to raise $9 billion. The fund will invest $500 million to $1.5 billion in software and technology-enabled services companies in North America.
The pension fund invested $195 million in three of Thoma Bravo’s previous funds.
Minnesota SBI committed $150 million to Paine Schwartz Partners’ fifth food-chain fund, which is expected to raise $1.2 billion. The fund will target businesses based in Organization for Economic Cooperation and Development countries.
The pension committed $165 million to Paine Schwartz’s three previous funds.
Minnesota SBI committed $100 million to Goldman Sachs’s new China-U.S. Industrial Cooperation Partnership buyout fund, which is targeting $5 billion.
The fund is a partnership between Goldman’s merchant-banking division and China Investment Corp to give U.S.-based companies access to commercial opportunities with China.
The buyout fund will make eight to 12 investments between $250 million to $1 billion and focus on non-high-tech businesses and investments.
The pension fund invested $400 million in four previous Goldman Sachs funds.
And Minnesota SBI also committed $75 million to Goldner Hawn Johnson & Morrison’s seventh fund, which is expected to raise $250 million. It committed $110 million to the private equity firm’s three previous funds.
The pension fund will also consider a commitment to BlackRock’s long term PE fund that will make direct investments, the Wall Street Journal reported in February 2018. The fund expects to raise $10 billion in commitments, the report said.