Firms & Funds

Washington commits $800 mln to three GPs, including Leonard Green

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Washington State Investment Board, private equity, pension fund, Wellspring Capital Management, New Mountain Partners
The Space Needle is seen as snow flurry clouds surround downtown Seattle January 17, 2012. Residents of the Puget Sound region are bracing themselves for a major snowstorm overnight that is expected to deliver the highest snowfall in 25 years. Photo courtesy of REUTERS/Anthony Bolante - RTR2WFPP
  • Pension backs Charterhouse, Leonard Green, TCV
  • Previous Leonard Green fund nets 12.56 pct
  • Washington values PE portfolio at $17.8 bln

The Washington State Investment Board committed up to $800 million to private equity at its February 18 meeting.

Washington made the commitments across three re-ups with existing managers Charterhouse Capital Partners, Leonard Green & Partners and Technology Crossover Ventures, spokesman Chris Phillips said in an email. All three commitments remain subject to continuing due diligence and negotiations.

The largest commitment went to Leonard Green’s seventh flagship fund, which recently raised its target to $8.5 billion from $7.5 billion for investments in North American buyouts. The $103.4 billion retirement system committed up to $350 million to Green Equity Investors VII, Phillips wrote.

A $300 million commitment to Green Equity Investors VI netted Washington a 12.56 percent internal rate of return and 1.2x multiple through June 30, according to investment board documents. Fund V netted 18.4 percent with a 1.8x multiple through the same date.

Washington also backed Charterhouse Capital Partners X for up to 225 million euros (roughly $250 million as of February 19). Charterhouse set a 3 billion euro target with a 3.5 billion euro hard cap for its new fund, which will invest in buyouts in the United Kingdom and Western Europe, Phillips wrote.

The investment board is a limited partner in Charterhouse’s four previous flagship efforts. The most recent fund, a 4 billion euro 2009 vintage, netted Washington a 14.08 percent IRR and 1.4x multiple through June 30, according to retirement system documents.

Finally, Washington committed up to $200 million TCV IX, a growth equity fund targeting $2.25 billion with a $2.5 billion hard cap. Washington is an LP in Fund VIII, which held a final close on $2.23 billion in 2014.

Washington valued its private equity portfolio at $17.8 billion through September 30, according to pension documents. The portfolio netted the retirement system an 11.44 percent return on a 10-year annualized return as of the same date, clearing its benchmark by 29 basis points. The benchmark is the Russell 3000 plus 3 percentage points.

Action Item: For detailed performance of Washington’s private equity portfolio, visit http://1.usa.gov/24fhZn9