Washington approves over $2.2 bln in private market commitments

  • Includes new relationships with Carlyle, PAI
  • Providence, Warburg, Stonepeak receive re-ups
  • Washington PE portfolio valued at almost $20 bln

Washington State Investment Board approved private market fund commitments totaling more than $2.2 billion at its meeting last week, according to spokesman Chris Phillips.

The commitments include an allocation for up to $600 million to Carlyle Group’s newest flagship buyout fund, which is targeting $15 billion with an $18 billion hard cap. This marks Washington’s first commitment to a Carlyle fund since the inception of its PE program in 1981.

Carlyle Partners VI closed on $13 billion in 2013. Its predecessor, which raised $13.7 billion in 2008, was grossing a 26 percent internal rate of return and 2.6x multiple as of Sept. 30, a firm presentation shows.

Washington also formalized a new relationship with PAI Partners, which is targeting 4 billion euros ($4.7 billion) with a hard cap of 5 billion euros. Washington committed up to 200 million euros to the European buyout fund, which is expected to have a final close in the first quarter, Buyouts reported.

The $124.6 billion public pension’s new commitments also included three re-ups to managers with which it has existing relationships.

  • Providence Equity received a commitment of up to $400 million for its new flagship fund, which is targeting $5 billion with a $6 billion hard cap for investment in media, communications, education and information-services companies.
  • Washington will commit up to $225 million to Warburg Pincus’s new financial-sector fund, which is targeting $1.6 billion with a $2 billion hard cap.
  • The public pension backed Stonepeak Infrastructure Partners’ third flagship fund, which could raise as much as $7 billion, for up to $600 million. Another $150 million was re-upped to an existing evergreen separate account that co-invests alongside Stonepeak’s primary funds.

Each of Washington’s approved commitments remain subject to final negotiation of terms and conditions, Phillips said. The pension’s commitment sizes do not include fees and expenses associated with the funds.

Washington’s PE portfolio was valued at $19.6 billion as of Sept. 30, 2017. The portfolio was netting a 13.13 percent IRR and 1.6x multiple through June 30.

Action Item: Washington’s PE portfolio: www.sib.wa.gov

The Space Needle is seen as snow-flurry clouds surround downtown Seattle on Jan. 17, 2012.  Photo courtesy Reuters/Anthony Bolante