Wisconsin co-investment program grows quickly

  • Commits $45 mln to three deals
  • Biggest investment goes to energy co
  • Also backs consumer, financial services cos

The board did not disclose many details about the co-investments, except that it allocated $20 million for investment in an energy company, $15 million for a financial services company and $10 million for a consumer discretionary company.

Wisconsin reportedly launched its co-investment program earlier this year and expanded the program in September. Under its original policy, Wisconsin investment staff was limited to co-investments with existing fund managers. The investment board changed the policy to allow its investment staff to pursue any deals with former managers or any deal approved by CIO David Villa or Executive Director Michael Williamson, according to documents sent by Wisconsin spokeswoman Vicki Hearing.

Hearing did not respond to a request for a follow-up comment.

Bolstering the co-investment program capitalizes on many general partners’ unwillingness to pursue joint acquisitions (aka club deals) with other firms, according to Wisconsin documents. With joint acquisitions out of favor, PE firms often tap limited partners to take direct stakes in companies through co-investments. Capital allocated to co-investments represented roughly a third of private equity fundraising in 2013 and 2014, according a report from private equity advisor Triago that cites Hamilton Lane data.

In addition to its allocation to three co-investments, Wisconsin committed $50 million to Dyal Columbus Co-Investment Partners fund, which is managed by Dyal Capital Partners. Details about the fund were unavailable.

Fund commitments

Wisconsin also closed on four fund commitments in the third quarter. The biggest allocation, $125 million, went to Hellman & Friedman’s recently closed $10.9 billion fund.

Wisconsin also committed $75 million across two Inflexion Private Equity middle-market funds and $50 million to JMI Equity’s latest growth equity vehicle, which closed on $1 billion in August.

The State of Wisconsin Investment Board manages $103.1 billion in state assets, including $96 billion in state retirement funds. Its private equity portfolio was valued at roughly $7 billion as of September 30.