Washington state forms new relationships with Wellspring, New Mountain

  • Washington committed $200 mln to each firm
  • Both funds focusing on mid-market deals
  • Washington’s PE portfolio valued at $18.7 bln

Washington State Investment Boardformalized new relationships with two private equity firms at its meeting last week.

The board, which oversees the state’s $120.4 billion investment portfolio, approved commitments of $200 million each to flagship funds raised by Wellspring Capital Management and New Mountain Partners, according to spokeswoman Tish Day. Both commitments are subject to continued due diligence and final negotiation of terms and conditions.

Wellspring set a $1.2 billion target with a $1.3 billion hard cap, Day said. Wellspring, founded in 1995 by Greg Feldman and Martin Davis, specializes in middle-market buyouts.

As with previous Wellspring funds, Fund VI will make 10 to 13 core investments with an average investment size of $50 million to $150 million. The firm’s investment funds have netted a 23.2 percent internal rate of return on average, an Aug. 18 LP memo obtained by Buyouts shows.

New Mountain’s fifth flagship buyout fund is targeting $5 billion with a $5.85 billion hard cap, according to Day. The firm specializes in middle-market buyouts, typically investing $100 million to $500 million per deal, a Pennsylvania Public School Employees’ Retirement System memo says.

New Mountain IV, which closed on $4.13 billion in 2014, was netting a 23.8 percent IRR and 1.3x multiple through Dec. 31, according to the Pennsylvania memo.

Washington’s PE portfolio was valued at $18.7 billion as of June 30, 2017. Its PE portfolio has delivered a 13.07 percent internal rate of return since its inception.

Action Item: More on Washington State Investment Board: www.sib.wa.gov/