LPs

Minnesota commits $550 mln to PE in February

-
Minnesota State Board of Investment, pension fund, private equity
Fans gather outside First Avenue, the nightclub where U.S. music superstar Prince got his start in Minneapolis, Minnesota, April 21, 2016. Prince, the innovative pop superstar whose songwriting and eccentric stage presence electrified fans around the world with hits including "Purple Rain" and "When Doves Cry," died on Thursday in Minnesota. He was 57. REUTERS/Craig Lassig - RTX2B4B5
  • Minnesota backs Silver Lake, Vestar flagship funds
  • Commits $150 mln to KKR’s latest Asia fund
  • Minnesota PE portfolio returns 1.55x since inception

Minnesota State Board of Investment backed four private equity funds for a combined $550 million at its Feb. 23 meeting.

The $59.9 billion retirement system allocated up to $150 million each to three buyout funds — managed by Kohlberg Kravis Roberts, Silver Lake and Vestar Capital Partners — and $100 million to Adams Street Partners’ sixth secondaries fund.

All four commitments are current relationships for Minnesota, which valued its PE portfolio at $4.7 billion as of Dec. 31, pension documents say.

Minnesota’s $150 million commitment to KKR went to the firm’s third Asian PE fund, which is targeting $7 billion to invest in food safety and agriculture, healthcare and financial-services companies, Minnesota investment memos show.

The firm’s two previous Asian buyout funds, a $4 billion 2007 vintage fund and a $5.8 billion 2013 vintage fund, were netting internal rates of return of 14 percent and 26 percent as of Sept. 30, 2016, respectively.

Silver Lake set a $12.5 billion target for its latest flagship fund, which is expected to hold a first close next month, Buyouts has reported. The firm’s $10.3 billion 2013 vintage fund was netting a 25 percent IRR and 1.3x multiple through Sept. 30, Minnesota documents say.

Vestar, targeting $1 billion for its latest flagship fund, is netting a 30 percent IRR from its $814 million 2012 vintage fund. As with previous Vestar funds, Vestar Capital Partners VII will acquire mid-market businesses with enterprise values up to $1 billion.

Adams Street set a $1.2 billion target for its new secondaries fund, according to Minnesota documents. The firm’s previous secondaries fund, which raised $1.1 billion in 2012, was netting a 1.8 percent IRR and 1.03x multiple through Sept. 30.

Minnesota’s PE portfolio has returned a 1.55x multiple since inception, its latest investment report says. The portfolio distributed $1.7 billion last year.

Action Item: More about Minnesota’s portfolio: www.mn.gov/sbi/

Fans gather on April 21, 2016, outside First Avenue, the Minneapolis nightclub where U.S. music superstar Prince got his start. Photo courtesy Reuters/Craig LassigÂ