Wisconsin splits private-equity, VC allocations

  • Wisconsin counted VC as part of its private-equity allocation
  • VC allocation capped at 2 pct of core trust fund
  • Allocation will include in-state investments

The State of Wisconsin Investment Board will extract venture-capital investments from its private-equity portfolio and create a separate allocation to venture-related strategies, according to investment-board documents.

The Investment Board approved the proposal at its March 8-9 meeting. Wisconsin currently groups VC funds and co-investments within its private-equity allocation. The new venture-capital portfolio will include SWIB’s existing allocations to traditional VC funds as well as fund commitments and direct investments held through its in-state private-equity program.

The new venture-capital portfolio will be around $1.3 billion initially, according to Wisconsin spokeswoman Vicki Hearing.

SWIB capped its venture-capital allocation at 2 percent of its core trust fund, valued at $83 billion as of Jan. 31, and 25 percent or less of its $13 billion private-markets portfolio, which includes SWIB’s investments in real estate, private debt and private equity.

In addition to setting parameters around its venture-capital portfolio’s size, Wisconsin also established guidelines for the level of approval required for each commitment to a new manager, a re-up or a co-investment as part of the new portfolio, outlined in the attached SWIB chart.

Wisconsin valued its private-equity portfolio at $5.9 billion as of January 31, according to its March meeting materials. The portfolio generated a 10-year annualized return of 11.5 percent, clearing its benchmark by about 2 percentage points.

Action Item: For more information about Wisconsin’s venture-capital allocation, read SWIB’s March 8-9 meeting materials at http://bit.ly/22pVnOQ