The Washington State Investment Board has edged above its target allocation to private equity, with investments accounting for 25.3 percent of its $56.3 billion portfolio as of the end of September, according to sister publication Buyouts magazine. Its target allocation is 25 percent.
The deep-pocketed state’s PE holdings, which date back to 1981, were valued at an estimated $13.8 billion at the end of March, according to data on the investment board’s Web site. The portfolio at that point consisted of interests in 245 funds to which the state had committed an estimated $32.5 billion. Of that, PE firms had drawn down an estimated $27.6 billion and returned $24.5 billion.
Older funds that appeared, as of March, to have drawn down quite a bit more than they’ve distributed include Frazier Healthcare IV ($40 million committed in or around 2001, $37.8 million drawn down, $13.2 million distributed), OVP Venture Partners VI ($40 million committed in or around 2001, $40 million drawn down, and $5.6 million distributed), and Green Equity Investors IV ($100 million committed in or around 2003, $107.4 million drawn down and $36.1 million distributed).
What being above target allocated means for one of the industry’s biggest limited partners—the board committed more than $3 billion to private-equity funds in both 2007 and 2008—isn’t yet apparent. But we know that its pockets still weren’t empty as of the board’s Nov. 18 meeting.
According to spokeswoman Liz Mendizabal, the board approved an investment of up to $200 million to Vestar Capital Partners VI LP, a buyout fund with a target of $3.5 billion. Washington also committed $175 million to the three predecessor funds managed by New York-based Vestar Capital Partners—$20 million to the third fund in 1997 (producing a 1.27x investment multiple for the state as of March 30), $55 million to the fourth fund in 1999 (1.62X), and $100 million to the fifth fund in 2005 (1.22x).
At the same meeting the board approved an investment of up to $200 million to KSL Capital Partners III LP, earmarked for acquisitions of companies in the travel and leisure industry. Denver-based KSL Capital Partners has more than $1. 6 billion under management, according to its Web site. Washington has provided nearly 10 percent of that amount—$100 million committed in 2006 (producing a 1.14x investment multiple for the state as of March 30), and $50 million in 2009 (1.23x).