North Dakota sells Corsair fund stake as it pares portfolio

  • State sells legacy funds in secondary market
  • AUM: $13.7 bln; allocation to PE: 3.3 pct; target 6.5 pct

North Dakota State Investment Board sold a $25 million commitment in Corsair Capital’s fourth fund to Hamilton Lane, a source close to the pension system confirmed.

North Dakota pension trust’s PE portfolio has underperformed mainly because of investments made before 2013, David Hunter, the pension system’s CIO, has told Buyouts.

“Although the North Dakota State Investment Board generally does not engage in the transfer of private market investments in the secondary market, we will consider secondary market transfers if aligned with our overall long-term strategic investment objectives,” Hunter said.

Corsair’s Fund IV was a star performer in North Dakota’s legacy PE portfolio.

The fourth fund raised $773.8 million in 2012 and returned 26.61 percent over one year, 14.98 percent over three years and 17.93 percent over five years as of June 30, 2017, pension documents said.

Other legacy PE commitments have been a drag on North Dakota’s overall PE performance.

Corsair’s third fund returned a negative 34.35 percent over one year, negative 1.99 percent over three years and negative 2.96 percent over five years as of June 30, 2017, documents said.

Capital International’s fifth fund returned negative 20 percent and the Lewis & Clark fund returned negative 17.39 percent over five years as of June 30, 2018, documents said.

Founded in 1992 as a buyouts arm of JP Morgan, Corsair is led by JPM veterans Nicholas B. Paumgarten, chairman, and D.T. Ignacio Jayanti, president, who led the firm’s spinoff from JP Morgan Chase & Co in 2006.

Corsair focuses on growth capital, take-privates and carveouts, and distressed investing in financial companies worldwide.

Corsair’s current portfolio includes First Eagle Investment Management, Jackson Hewitt, Camberview Partners, Spring Venture Group, Repay, Kyobo, and Personal Capital.

Hamilton Lane did not respond to requests for comment.

Action Item: Read more on North Dakota’s investments here