Wisconsin cleans up on co-invests, reveals $800 mln-plus commitment activity

The State of Wisconsin Investment Board had robust private equity results for fiscal year 2019 and made about $855 million in private equity commitments in the second quarter, according to updates given to the board during September meetings. The board invests on behalf of the Core Trust Fund of Wisconsin Retirement System.

Wisconsin’s four separate private equity portfolios showed generally strong returns for fiscal year 2019, according to a report delivered to the investment committee on Sept. 24. Co-investments had especially strong returns.

The portfolios are: core private equity, co-investments, current return and a legacy portfolio. The core private equity portfolio had returns of 11.8 percent in FY19, beating the 10 percent benchmark. Co-investments returned 20.9 percent for the year, over a 7.6 percent benchmark. The legacy portfolio’s returns were not included in the report.

The only one of the portfolios that did not beat its benchmark was current return, which had 5 percent returns versus a 5.2 percent benchmark.

The board’s private equity portfolios had a net asset value of $7.725 billion as of June 30, making up 7.5 percent of the Core Trust Fund.

At a meeting of the full board Sept. 10-11, Wisconsin released its Q2 and fiscal year 2019 performance numbers. Total private equity and debt returns were 13.11 percent for the year ending June 30, passing the 10.85 percent benchmark. Private equity and debt made up $9.249 billion of the total fund.

The entire Core Trust Fund had net returns of 7.81 percent for FY19 against a 7.63 percent benchmark. The Core Trust Fund was valued at $103.3 billion.

Q2 Commitments

The Q2 commitments consisted of about $790 million to private equity funds and $65 million to co-investments.

The fund commitments are:

• €100 million ($110 million) to Advent International IX, a global buyout fund managed by Advent International that closed at $17.5 billion in June;

• $50 million to Bookend Capital I, a small U.S. buyouts fund managed by Bookend Capital Partners with a $300 million target that makes controlled buyouts of product companies and related distribution companies in the professional, industrial and consumer markets;

• $50 million to Clairvest VI, a $850 million middle markets buyout fund managed by Clairvest Group, which closed at its hard cap in April;

• $75 million to Clearlake Opportunity Partners II, a $1.4 billion middle market credit fund managed by Clearlake Capital Group that closed in June;

• $50 million to GSO Sr. Debt II, a fund making large credit investments in Europe and run by GSO Capital Partners, the private credit arm of Blackstone, which started raising earlier this year, according to sister publication Private Debt Investor;

• £20 million ($24.4 million) to Inflexion Enterprise Fund V, a £400 million ($488 million) fund managed by Inflexion and focusing on small buyouts that closed in May;

• €75 million ($82 million) to InvestIndustrial VII, a European middle-market buyout fund run by Italy-based Investindustrial, which has a $3.3 billion target, according to Alt Assets;

• $100 million to Private Equity Solutions, a Luxembourg-based fund run by DWS Investment S.A. focused on secondaries in the U.S. and Europe that had raised $150 million as of June 9, according to a Form D;

• $100 million to Providence Strategic Growth IV, a $2 billion growth fund managed by Providence Equity Partners that closed in September at its hard cap;

• $100 million to Trident Fund VIII, a U.S. large buyouts fund managed by Stone Point Capital with a $6.5 billion hard cap and a $5.75 billion target, according to sister publication Private Equity International;

• $50 million to Warwick Partners IV, an energy fund run by Warwick Energy Investment Group.

Wisconsin declined to identify its co-investments, but the commitments are:

• $25 million to a co-investment in an industrials company;

• $25 million to a co-investment in an information technology company;

• $15 million to a co-investment in a financial services company.

Action item: read Wisconsin’s meeting materials here.