Wisconsin to bulk up private market co-investment team

  • Plans to expand private-market co-invest team in ’18
  • New private-market, current-return co-invest staff sought
  • Committed $115 mln to eight PE co-investments in ’17

State of Wisconsin Investment Board wants to bulk up its private-market co-investment staff, a strategy presentation in the board’s recent meeting materials shows.

The presentation, delivered at the board’s April 10-11 meeting, says Wisconsin plans to recruit a senior investment professional and investment analyst to source and underwrite private-market co-investments.

The board also is looking for a managing analyst to oversee co-investments for its current-return portfolio, which includes assets that share characteristics of private-market and fixed-income investments.

Co-investments can help LPs exert greater control over the composition of their private equity portfolios at comparatively lower cost.

Fund managers typically charge LPs an annual management fee in addition to taking 20 percent or more of the fund’s profits as carried interest. With co-investments, some general partners will offer investors a direct stake in a fund’s underlying portfolio company on a no-fee, no-carry basis.

Wisconsin’s investment board, which manages roughly $117 billion of state assets, committed $115 million to eight new co-investments last year. The co-investment team allocated another $6 million across three existing co-investments.

Despite indications earlier this year that it would raise the caution flag on future co-investments, the April board presentation reports SWIB plans to increase its co-investment programs for both PE and debt-related assets in 2018.

In February, Wisconsin’s PE co-investment team reported it was being “cautious given the current purchase price multiples and debt levels exhibited in the market,” the presentation says.

Wisconsin completed two co-investments in Q1, allocating $25 million to a financial company and $15.6 million to an IT business. SWIB did not specify those investments. SWIB Communications Manager Vicki Hearing did not respond to requests for comment.

In addition to its co-investments, Wisconsin committed $342.8 million across four PE funds in Q1 (see chart).

State of Wisconsin Investment Board Q1 Private Market Commitments
Fund Commitment
Fund Target/Size
American Securities Partners VIII $75 mln $7 bln
Bridgepoint Europe VI $92.8 mln 5.5 bln euros
Lake Pacific Fund II $50 mln N/A
Resolute Fund IV $75 mln $3.2 bln
Sentinel Capital Partners VI $50 mln $2.15 bln
Source: SWIB, Buyouts