Pension System: Washington State Investment Board
Assets Managed: $85 Billion (March 31, 2011)
Private Equity Assets: $15.7 Billion (Main Trust Fund, March 31, 2011)
Private Equity Allocation: 25% (Main Trust Fund, March 31, 2011)
Private Equity Target: 25% (Main Trust Fund)
Chief Investment Officer: Gary Bruebaker
The $85 billion Washington State Investment Board continued its push into global private equity markets at its June board meeting, contributing $800 million, or $400 million each to two funds, one the latest flagship fund from Advent International and the other from Nordic Capital, which invests mainly in Scandinavia and nearby areas.
The two pledges supplement two large global commitments the board made in February, a $400 million pledge to the latest pan-Asia fund from Kohlberg Kravis Roberts & Co., and the other, a $250 million commitment to London-based Cinven Group, which focuses on Europe.
The two new commitments were both for the state’s $62 billion Commingled Trust Fund, which holds its main pension investments. About 25 percent of CTF’s portfolio is invested in private equity, amounting to $15.7 billion in invested private equity capital, as of March 31. The fund is currently at its 25 percent private equity target, which is among the highest in the nation. The fund has about $7.1 in unfunded commitments.
Washington State committed $400 million to the latest fund from Advent International, Advent International Global Private Equity VII LP, one of the largest funds currently in the market, which is seeking $9 billion in commitments overall. The state committed $136 million to the prior fund in the series, the 2008 vintage Fund VI, which so far has delivered 7 percent IRR and a 1.1x return multiple according to Washington State return data from Dec. 31. The fund intends to focus mainly on investments in Europe and the Americas.
The state made three other commitments to Advent funds, $125 million across two Advent funds that focus on Latin American private equity, and a third $15 million commitment to a venture fund jointly administered by TA Associates. Advent was spun out from TA in 1985.
The second investment was $400 million to Nordic Capital’s latest fund, Nordic Capital Fund VIII, which is seeking to raise $5.2 billion. The firm invests in the Scandinavian nations of Denmark, Sweden, Norway and Finland, but also makes investments in nearby countries such as Germany.
Washington has invested more than $800 million across the last four funds from Nordic Capital, Funds IV, V, VI and VII. By far the largest commitment was $415 million to the latest fund in the series, the 2008 vintage Fund VII, which has so far generated an IRR return of -15 percent and a return multiple of 0.8x.