- New commitments include allocations to Platte River, Merit
- Wisconsin also makes three co-investments
- PE portfolio valued at $7.8 bln
State of Wisconsin Investment Board is continuing to allocate the bulk of its PE commitments to small and mid-market private equity firms, an investment disclosure the public pension released last week shows.
Wisconsin committed a little more than $200 million to small and mid-market PE funds in Q2, including flagship offerings from Chequers Capital, Platte River Equity and Merit Capital Partners.
“SWIB continues to add high quality managers focused on small/mid[-sized] buyouts. SWIB is also being very selective in looking for credit managers that will opportunistically take advantage of market dislocations,” according to a staff presentation included in the meeting material.
The report also noted PE firms operating at the lower end of the market have been more successful than their larger counterparts in acquiring businesses at reduced prices. Large buyouts averaged purchase-price multiples of 10x to 11x EBITDA recently, the report said, compared with 8x to 9x EBITDA for smaller businesses.
SWIB executed commitments with larger funds as well, including $114.1 million to CVC Capital Partners’ seventh buyout fund, which held a final close on 16 billion euros ($18.9 billion) earlier this year. Glendon Capital Management, which is raising its second fund with a $2 billion target, received a $100 million allocation from Wisconsin.
Wisconsin’s Q2 commitments also included three co-investments totaling more than $34 million. Two of the co-investments were for deals in industrial businesses, with $4.8 million allocated to a deal in a materials company.
SWIB did not disclose any additional information about the co-investments. A SWIB spokesperson did not respond to a request for comment.
“We believe co-investments make us a better fund investor. It allows us to build deeper and broader relationships with GPs,” Senior Investment Officer Chris Eckerman of Wisconsin said on a panel at the Pension Bridge conference in Chicago in July. “It allows you to spend time with some of these deal teams, the groups on the ground, that you’d like to get to know better.”
Wisconsin valued its PE program at roughly $7.8 billion as of June 30. The portfolio was netting a 10-year annualized return of 8.92 percent.
Action Item: More on Wisconsin’s PE program: www.swib.state.wi.us