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By The Numbers: Washington State Investment Board’s Buyout Portfolio Performance

It’s earnings season in private equity land, and by that, I mean the time of year when the dozen or so pension funds that disclose their return data update their quarterly numbers. The latest round of updates generally brings the return figures current as of September 30, 2010.

We don’t have the resources at sister magazine Buyouts to compile all the numbers and generate overarching statistics, as we do once a year every fall. But I thought it still would be interesting to produce statistics for one of the oldest and largest PE portfolios in the country–that managed by Washington State Investment Board. So, below follow some statistical highlights for the state’s buyout portfolio, as of September 30. The performance numbers (including median, bottom-quartile, top-quartile return data for small, mid-sized, large and mega-firms) were generated using only numbers from the 85 vintage 2005 and older buyout funds in the portfolio to avoid the J-curve effect:

–Total Number of Buyout Funds Backed: 130

–Total Dollars Committed to Buyout Funds: $22.4 billion

–Total Dollars Drawn Down to Buyout Funds: $20.2 billion

–Unfunded Commitments to Buyout Funds: $5.5 billion

–Oldest Buyout Fund in Portfolio: KKR 1982 Fund LP

–Best-Performing Buyout Fund, by Investment Multiple: KKR 1986 Fund LP (5.5x)

–Worst-Performing Buyout Funds, by Investment Multiple: Banc Fund VII LP ** (0.5x) and Heritage Fund III LP (0.5x)

–Best-Performing Buyout Fund, by Net IRR: GTCR Fund VII-A LP (83.01%)

–Worst-Performing Buyout Fund, by Net IRR: Heritage Fund III LP (-24.13%)

Small Buyout Funds (15 funds)

–Median Total Value Multiple, Net IRR: 1.7x, 10.68%

–Top-Quartile Total Value Multiple, Net IRR: 2.3x, 19.57%

–Bottom-Quartile Total Value Multiple, Net IRR: 1.2x, 2.79%

Mid Market Buyout Funds (37)

–Median Total Value Multiple, Net IRR: 1.6x, 11.21%

–Top-Quartile Total Value Multiple, Net IRR: 2.0x, 25.82%

–Bottom-Quartile Total Value Multiple, Net IRR: 1.2x, 5.05%

Large Buyout Funds (23)

–Median Total Value Multiple, Net IRR: 1.6x, 14.06%

–Top-Quartile Total Value Multiple, Net IRR: 2.1x, 21.88%

–Bottom-Quartile Total Value Multiple, Net IRR: 1.2x, 7.07%

Mega-Buyout Funds (10)

–Median Total Value Multiple, Net IRR: 3.0x, 17.62%

–Top-Quartile Total Value Multiple, Net IRR: 3.5x, 28.88%

–Bottom-Quartile Total Value Multiple, Net IRR: 1.6x, 13.09%

** Banc Fund VII LP has rebounded to a .61x as of press time, according to the firm, which sees plenty of unrealized value left in the portfolio. President Charles Moore explained that the fund, earmarked for small community banks and related investments, was situated “too close to ground zero” in the 2008 financial crisis; he pointed out that the first five funds in the family generated net IRRs to investors ranging from 15% to 21%, and that Fund VII is the worst-performing by an “enormous margin.”