Washington commits $400 mln to private equity

  • $79 bln pension re-ups with KSL, Endeavour
  • KSL targeting $2.25 bln for travel, leisure investments
  • Washington held 23 pct allocation to PE

The Washington State Investment Board committed $400 million to private equity at its Dec. 18 meeting, allocating $250 million to KSL Capital Partners and $150 million to Endeavour Capital, spokeswoman Kate Sandboe said in an email.

Washington is a limited partner in older funds raised by both managers, Sandboe said.

KSL set a $2.25 billion target for its fourth flagship fund, which will invest in travel and leisure businesses. The Denver-based firm typically invests between $25 million and $400 million of equity per deal. KSL also provides mezzanine financing on certain transactions, according to its website.

Washington committed $100 million to KSL Capital Partners II in 2006; $50 million to KSL Capital Partners Supplemental in 2008; and $200 million to KSL Capital Partners III in 2010, Sandboe said. Those commitments netted internal rates of return of 14.39 percent, 11.46 percent and 25.5 percent, respectively, as of June 30, according to Washington documents.

Washington also committed $150 million to Endeavour Capital Fund VII, which is targeting $700 million for investments in lower middle market companies in the Western U.S. The $79 billion retirement system committed $50 million to Endeavour Capital Fund IV in 2003, $65 million to Fund V in 2007, and $95 million to Fund VI in 2011.

Washington held a 23 percent allocation to private equity as of Sept. 30, according to state documents. The retirement system’s private equity portfolio was valued at roughly $18 billion.