Pension System: State of Wisconsin Investment Board
Chief Investment Officer: David Villa
Assets: $88 billion
Allocation to Private Equity: 6%
Following the best performance in 25 years for Wisconsin’s main pension fund, the State of Wisconsin Investment Board outlined long range plans to commit more than $6 billion to private equity through 2016, including $1 billion each year in 2011 and 2012, rising annually after that to reach $1.4 billion per year in 2015 and 2016, according to a report by StepStone Group, Wisconsin’s private equity adviser.
Overall, the IRR for Wisconsin’s private equity portfolio was 12.9 percent for the year through March, beating the portfolio’s 12.1 percent benchmark, according to StepStone. Private equity returns for Wisconsin represented a gain of $949 million for the year.
Wisconsin’s investment board oversees $13.6 billion in private equity commitments, including $5.5 billion in invested capital. Overall, the board oversees $88 billion in assets.
The news of Wisconsin’s private equity plans comes weeks after the state revealed strong returns for its main pension pool, the diversified “core” fund, which returned 22.9 percent for year ending June 30, the fund’s best annual performance since 1986.
Separately, the board made 10 commitments, together worth more than a half billion dollars, to private equity, venture capital and real estate funds in the most recent quarter, according to a report from its latest meeting on Aug. 17.
Among the investments declared at its August meeting are six commitments to private equity funds, according to Vicki Hearing, SWIB’s public information officer. These commitments include a $25 million pledge to ABRY Partners’ ABRY Partners VII LP, a $1.6 billion fund focused on investments in the media and telecom industries. Wisconsin also committed $100 million to American Securities’ American Securities Partners VI, LP, a $3 billion middle-market fund run by one of the nation’s oldest buyout firms. Wisconsin is also committing $40 million to Berkshire Partners’ Berkshire Partners VIII LP, a fund in very high demand that recently closed with more than $4 billion. Also on Wisconsin’s list was $50 million for Chequers Capital’s Chequers Capital XVI, a $1.2 billion private equity fund focusing on French buyouts. Broadening out its European exposure, Wisconsin pledged $65 million to EQT Partners’ $6 billion EQT Fund VI, LP, a fund that closed in July and which will focus on Nordic and German buyouts. And finally, Wisconsin pledged $50 million to Waterland Private Equity Investments’ Waterland Private Equity Fund V LP, a $1.6 billion buyout fund that is focused on German, Belgian and Dutch buyouts.
The pension system also made commitments to two venture capital funds: $25 million each to DAG Ventures V, LP and FirstMark V LP. Rounding out Wisconsin’s commitments were two pledges to real estate funds, including $50 million to Bristol Miami SC and $100 million to Prudential Senior Housing Fund IV.