Firms & Funds

Washington re-ups with Warburg Pincus for $200 mln

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private equity, pension fund, Warburg Pincus, China
Workers peel papers off a wall as they re-paint the Chinese Communist Party flag on it at the Nanhu revolution memorial museum in Jiaxing, Zhejiang province May 21, 2014. REUTERS/Chance Chan (CHINA - Tags: POLITICS SOCIETY) - RTR3Q5F8
  • Washington backs firm’s debut China fund
  • System has committed over $3.8 bln to firm since 1994
  • PE portfolio nets 13 pct IRR

Washington State Investment Boardcommitted $200 million to Warburg Pincus’s new China fund, which is targeting $2 billion for investments in Chinese companies.

The commitment remains subject to the final negotiation of terms and conditions.

Washington is a longtime investor in Warburg Pincus funds, having previously committed more than $3.8 billion across the firm’s flagship vehicles since 1994. The retirement system also committed $200 million to the firm’s dedicated energy investment vehicle in 2014.

Warburg Pincus began raising the fund earlier this year, the Wall Street Journal reported in March. Minnesota State Board of Investment committed as much as $100 million to the fund earlier this month.

Washington’s $17.5 billion private equity portfolio generated a 13 percent internal rate of return and 1.5x multiple through March 31, according to state documents. The retirement system had $12.7 billion of unfunded commitments as of March 31.

Almost three-quarters of the retirement system’s portfolio is allocated to buyout funds, with the rest dispersed across special situations/multi-strategy, venture capital/growth equity and distressed-debt vehicles, according to its most recent quarterly report.

More than half its funds’ portfolio-company holdings are in the healthcare, information-technology and consumer discretionary sectors.

Washington State Investment Board oversees roughly $108 billion of state retirement, permanent and trust funds. Roughly 20.1 percent of the state’s retirement assets, valued at $89.5 billion, were invested in private equity.

Action Item: For more information about Warburg Pincus, visit www.warburgpincus.com