Montana to wind down venture holdings

“Successful venture capital firms are exceedingly difficult to access…Approximately 5 (percent) of firms are responsible for 95 (percent) of returns,” according to the minutes. “Staff will continue to consider firms such as Northgate Capital Partners, a fund of funds manager, which has limited access to high performing venture capital managers.”

The Montana board will continue to commit to certain venture capital managers with which it has an existing relationship, according to meeting materials. Venture capital made up 25.8 percent of Montana’s $1.14 billion private equity portfolio market value as of March 31, according to meeting materials.

The board, which oversees $9.8 billion across nine state retirement systems, also disclosed $75 million in new private equity commitments in advance of its Aug. 19-20 meeting. Montana committed $20 million each to Guardian Capital Partners Fund II, Kinderhook Capital Fund V and Veritas Capital Fund V, as well as $15 million to The Catalyst Fund IV Parallel Limited Partnership, according to meeting materials.

The Kinderhook Industries, Guardian Capital Partners and Veritas Capital Fund Management funds were characterized as buyout vehicles. The Montana staff classified Catalyst Fund IV as a distressed fund.

A Montana representative did not respond to a request for further comment.

Buyout funds account for a majority of the private equity portfolio’s market value, at 51.3 percent. The portfolio includes smaller allocations to distressed, mezzanine, special situations and co-investment strategies, as well as venture capital.

In March, Montana committed $20 million each to Trilantic Energy Partners and GI Partners Fund IV.