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Washington goes large with $500 mln to Blackstone VII

  • Makes largest commitment to Blackstone fund
  • Blackstone targeting $15 bln, $17 bln hard cap
  • Pension also backs TA XII, Rh?ne

The Washington State Investment Board approved the largest commitment it has ever granted to Blackstone Group on April 17, committing $500 milliion to Fund VII, spokeswoman Liz Mendizabal said in an email.

Washington’s commitment to Fund VII is only its third with the Stephen Schwarzman-led giant. The $104.5 billion system previously committed $300 million to Blackstone Capital Partners VI and $400 million to Blackstone Capital Partners V, according to the retirement system.

Fund VI, a $16 billion 2012 vintage fund, generated a 1.2x multiple and an 18.1 percent net IRR as of Sept. 30, according to Washington. Fund V, which raised $21.6 billion in 2006, netted a 1.5x multiple and 8.1 percent IRR through the same date.

Blackstone set a $15 billion target with a $17 billion hard cap for Fund VII, which is scheduled to hold a first close on about $10 billion in April, Buyouts previously reported.

Washington is a major LP in other mega-funds. The system has committed to almost 30 funds managed by Kohlberg Kravis Roberts & Co and TPG Capital combined. In 2012, Washington allocated $750 million to Warburg Pincus Private Equity XI.

In addition to its commitment to Blackstone Capital Partners VII, Washington committed $250 million to TA Associates’ TA XII, which has a $4 billion target, Buyouts previously reported.

Washington is an LP in four previous TA Associates funds, Mendizabal said. The firm’s previous flagship vehicle produced a 1.4x multiple and 18.05 percent net IRR as of Sept. 30, according to Washington.

The retirement system also formed a new relationship with Rh?ne Group of New York and London, allocating 150 million euros ($162 million) to Rh?ne Partners V at the April 17 meeting. Rh?ne has not disclosed the target for Fund V. Buyouts reported in December Rh?ne was back in the market with Fund V.

Washington’s private equity portfolio was valued at $17.7 billion as of Dec. 31, according to its website.