Private Equity
Keith Bozarth, executive director of the $80 billion State of Wisconsin Investment Board, announced plans to retire in 2012, the extra time being needed to allow SWIB to find a replacement and help with a transition, according to a press release. Wisconsin runs one of the nation’s largest private equity programs. The system’s current private equity target is 7 percent, and SWIB manages about $5 billion in invested private equity capital. In a statement, the chairman of SWIB’s board of trustees, Jim Sentry, said, “We are sorry to see Keith leave, but appreciate his many accomplishments,” adding, “SWIB has accomplished a great deal (under Bozarth), including increasing its internal management of funds from 21 percent to 55 percent and revising its risk management process. These accomplishments have helped SWIB remain a model organization with an outstanding reputation.”
1 min read · 14 October 2011
As AXA gears up for a possible sale of its private equity unit, executives at the company could find themselves borrowing from The Carlyle Group’s playbook. AXA Private Equity, and particularly its chief executive, Dominique Senequier, are known to be seeking a management-led buyout financed in large part by one of its suitors. Such a structure is exactly what Carlyle agreed to when it acquired a 50 percent voting stake (and 60 percent of the equity) in AlpInvest Partners, one of Europe’s largest fund-of-fund managers, earlier this year. For Carlyle, the merger helped to diversify its slate of businesses, and more importantly, helped to increase its tally of assets under management prior to its expected IPO next year. For AXA Private Equity’s investors, a management-led buyout would offer incentives for keeping employees on board, something especially crucial in an era of “key-man” provisions. Senequier’s preference for a management-led buyout was first reported in the Financial Times.
3 min read · 06 October 2011
Harvard and Stanford, two of the nation’s richest universities, say that endowment returns for fiscal 2011 brought them to within striking distance of where they stood before the financial crisis lopped off billions of investment value. The Harvard Management Company, which manages the university’s endowment, reported a gain of 21.4 percent – or $4.4 billion – in fiscal 2011, which ended on June 30. That gain increased the size of Harvard’s endowment to $32 billion. The gain, on top of fiscal 2010’s return of 11 percent, marks a strong reversal for the giant endowment, which plummeted 27 percent – or $11 billion – in fiscal 2009, from a pre-crisis peak of $36.9 billion in fiscal 2008. That leaves Harvard just $4.9 billion shy of where it was before the financial crisis.
2 min read · 27 September 2011
The last time Buyouts, peHUB's sister publication, wrote about Clearwater Capital was January of 2010, when the firm had just begun to raise money for its latest fund, Clearwater Capital Partners IV. Its ambitious $1 billion target seemed reasonable back then, especially since Clearwater’s previous fund, Clearwater Partners III—which closed in 2007—raised $900 million, well above its original $500 million target. Twenty months later, however, it seems Clearwater, which invests in Asian distressed debt and special situations outside Japan, is facing some blustery fundraising headwinds. As of this month, Fund IV has only been able to raise between $200 million and $300 million, according to press reports. An executive at the firm declined to discuss the firm’s fundraising efforts or verify figures. The firm’s placement agent, Greenhill & Co., also declined to comment.
2 min read · 22 September 2011
The exodus continues on MassPRIM’s private equity team. Less than two months after the departure of Wayne Smith, Massachusetts Pension Reserves Investment Management’s private equity chief, the pension’s second-most-senior private equity manager, Senior Investment Officer Michael Langdon, also said that he was planning to leave. Langdon’s last day at MassPRIM is set for be Oct. 14, when he will join London-based Hermes Global Private Equity and help establish the firm’s Boston office. Hermes manages $7 billion in private assets, including $1 billion in the U.S. A spokeswoman for the $41 billion pension, Alethea Harney, said the timing of the two departures was an “unfortunate coincidence” and that the two departures “were not related in any way.”
2 min read · 21 September 2011
Sixteen California Public Employees Retirement System employees and former employees reached a preliminary settlement to pay fines for allegedly receiving but not properly reporting a slew of gifts that included a face scrubber, a hot air balloon ride and tickets to the Rose Bowl Game. The value of the gifts in question rarely exceeds the low three figures. The largest fine is a relatively modest $3,600. But the humiliation factor? (Priceless.) The list of alleged gift policy violators was made public by the California Fair Political Practices Commission. These penalties are slated to be finalized at a meeting of the FPPC on September 22nd. Recall that the FPPC initially investigated CalPERS employees back in May 2011, following even more severe charges by federal and state authorities alleging that former CalPERS Chief Executive Federico Buenrostro and others on CalPERS's private equity team were wined, dined and sent on luxurious trips at the invitation of Alfred Villalobos, a placement agent and former CalPERS board member who was working on behalf of Apollo Global Management. Villalobos and Buenrostro still face a state level lawsuit, and are also being investigated by federal authorities.
4 min read · 15 September 2011
When a large public pension fund dangles $900,000 in potential compensation in front of applicants, it gets a lot easier to lure top talent. That is exactly what the $51 billion Virginia Retirement System did when it announced it hired Ronald Schmitz (pictured) as its chief investment officer, replacing Charles Grant, whose contract expired in August. Schmitz is scheduled to start at the end of October. Schmitz was hired away from the $60 billion Oregon Public Employees Retirement System, where he has been chief investment officer since 2003. Prior to Oregon, Schmitz had a similar role at the Illinois State Board of Investment.
2 min read · 13 September 2011
The revolving door keeps spinning for the nation’s public pension chief investment officers. The $147 billion New York State Common Retirement Fund will lose its CIO, Raudline Etienne, to the private sector, where she will join the Albright Stonebridge Group as a senior director. The Albright Stonebridge Group is a consulting firm co-founded in 2001 by President Clinton’s former secretary of state, Madeleine Albright, former National Security Advisor Sandy Berger and former Sen. Warren Rudman. Eric Sumberg, a spokesman for New York State Comptroller Thomas DiNapoli, said "we wish her all the best in her new role." The comptroller's office, which oversees the fund, plans immediately to start searching for a replacement. The New York State Common Retirement Fund is the nation’s fourth-largest public pension fund.
2 min read · 13 September 2011
A new survey of private equity professionals reveals that the growth and popularity of private equity has been coupled with expectations among investors for better disclosure and accountability. Topping a list of 12 factors investors looked for when choosing a private equity firm was the quality of its management team, followed immediately by the clarity of its investment philosophy. In third place was investment performance, rising in importance from 2009, when an earlier version of the poll ranked performance seventh among the 12 factors. Portfolio transparency and fee structure also ranked highly among investors. The survey of 411 investors, fund managers and advisers was compiled by SEI, a financial outsourcing solutions provider, and Greenwich Associates, a financial research and strategy firm. Forty-nine percent of respondents were from North America, 30 percent in Europe and 21 percent from Asia, Latin America and other parts of the world.
2 min read · 30 August 2011
Following the best performance in 25 years for Wisconsin’s main pension fund, the State of Wisconsin Investment Board outlined long range plans to commit more than $6 billion to private equity through 2016, including $1 billion in both 2011 and 2012, rising to $1.4 billion per year in 2015 and 2016, according to a report by StepStone Group, Wisconsin’s private equity advisor. Overall, the IRR for Wisconsin’s private equity portfolio was 12.9 percent for the year through March, beating the portfolio’s 12.1 percent benchmark, according to StepStone. Private equity returns for Wisconsin represented a gain of $949 million for the year.
2 min read · 24 August 2011
