Rhode Island State Investment Commission spent $40 million to buy stakes in older Industry Ventures and Paine Schwartz Partners funds, according to the system’s director of communications, Evan England.
The system offered $10 million for the unknown seller’s interest in Industry Ventures Partnership Holdings Fund IV. The pool, which closed in 2016, focuses on primary commitments and early secondary purchases in small venture funds. The offer was accepted, according to a memo on Rhode Island’s website.
Rhode Island has previously invested in Industry Ventures. In 2014, the board committed $25 million to Fund III and $15 million to a Fund III co-investment; $10 million to Fund IV in 2015; and $30 million in February 2018 to Fund V, which closed with $335 million in June 2018, England said.
“Our policy is to commit up to 20 percent of PE allocation to advantageous secondary market opportunities,” England told Buyouts. “Particularly when it is with a manager with whom we are currently partnered.”
Venture capital commitments fall under Rhode Island’s private equity portfolio, England said in an email.
Rhode Island also bought an LP’s entire stake in Paine Schwartz’ Food Chain Fund IV, valued at $30 million. The fund invests in the food and agriculture industry, England said. Fund IV closed with $893 million in December 2014, Buyouts reported. The system committed $50 million to Fund V in 2018.
“The Fund has called 75 percent of commitments and completed eight investments over a four-year period,” Cliffwater CFA and Senior Managing Director Thomas Lynch wrote to the board in a memo. Fund IV is beyond its investment period and uncalled capital will be applied for fees and add-ons, according to Lynch.
As of Mar. 31, Paine Schwartz Food Chain IV generated 11.10 net IRR and a 1.27 net multiple, Buyouts reported.
Rhode Island’s private growth allocation, which private equity falls under, is 7.2 percent on a 11.25 percent target, as of July 31, according to a state investment commission report.
Action Item: View report and meeting documents here: https://bit.ly/2VfrWCb