Warburg Woos, Wins Washington Commitment

Pension: Washington State Investment Board

Assets Managed: $79 Billion (Sept. 30, 2011)

Private Equity Assets: $15.6 Billion (Sept. 30, 2011)

Chief Investment Officer: Gary Bruebaker

In the largest single commitment to a private equity fund this year, Warburg Pincus received a $750 million pledge from the Washington State Investment Board for its latest fund, Warburg Pincus Private Equity XI LP.

Washington State is known for making large private equity commitments and has one of the nation’s largest programs with $15.6 billion in invested private equity capital as of Sept. 30. The commitment by the $79 billion pension system constituted the lion’s share of $950 million worth of private equity investments that it announced on Dec. 16.

Warburg Pincus’s Fund XI, which is targeting $12 billion, started fundraising in June. The new fund’s target is smaller than its predecessor, the $15 billion Fund X, which the firm closed in 2007.

Washington State has been one of Warburg Pincus’s longest-term investors. The pension’s latest investment is its eighth since it started investing with the firm in 1994. Altogether, Washington State has committed $3.1 billion to various Warburg Pincus funds, according to state performance data.

Founded in 1966, Warburg Pincus manages more than $30 billion and invests across a variety of strategies.

Fund X, to which Washington State committed $750 million in 2007, has generated an IRR of 3.7 percent and a 1.1x return multiple through June. Fund IX, a vintage 2005 fund to which Washington pledged $700 million, has generated an IRR of 9.7 percent and a 1.5x return multiple through June.

Washington also committed $200 million to Denham Capital Management’s Denham Commodity Partners VI LP, an energy and commodities-focused fund that has a $2.5 billion target.

Denham Capital, which has about $4.3 billion under management, typically targets equity investments of between $50 million and $250 million, according to its Web site. The investment is Washington State’s first with Denham.