OBWC Saga (Finally) Over

The Ohio Bureau of Workers’ Compensation has finally sold off its private equity investment portfolio, according to minutes from its November 2008 board meeting (and first uncovered by Dow Jones). UBS had been running the process, which netted nearly $400 million for 67 funds.

For anachronistic context, we reported in April 2007 that UBS had pitched the fund’s NAV at $685 million, including around $271 million in unfunded commitments. If this is all new to you, here’s a graph from that same 2007 piece:

Ok, I know what some of you are thinking: “Isn’t this a bad thing, given how private equity typically outperforms public equity and bond indices?” Well, that would be true in most cases — but OBWC is exceptionally inept. It favors short-term political expediency over long-term investment strategy (thank you Coingate). It seems unable to properly file away partnership subscription agreements. And then there was its willingness – no, make that its eagerness – to sell general partners down the river by disclosing portfolio company valuations. In short, OBWC is kind of like that annoying guy at the poker table. He’s got enough money to keep anteing up, but is unable to differentiate between a low pair and a straight flush. At least OBWC knows when to fold them…