The Montana Board of Investments has committed $75 million to private equity through the month of November, according to recently released board documents.
$20 million was allocated to Kinderhook Capital Fund V, a $500 million buyout vehicle that held a first and final close in July. The fund was significantly oversubscribed and spent only twelve weeks in market. Kinderhook primarily makes control investments in companies with transaction values of $25-$150 million. The firm targets orphaned non-core subsidiaries of corporate parents, existing small capitalization public companies lacking institutional support and management-led recapitalizations of entrepreneur-owned companies.
$15 million was allocated to The Catalyst Fund IV, Parallel Limited Partnership. The distressed investments vehicle focuses on distressed-for-control investments in North America.
$20 million went to Guardian Capital Partners Fund II, a $153.5 million vehicle which focuses on control investments in lower middle market private companies located primarily in the United States.
Finally, another $20 million went to Veritas Capital Fund V, a $1.87 billion fund which closed in August, as PEI reported at the time. That fund hit the market in April and also held a first and final close in August. Fund V will continue Veritas’ strategy of investing in middle-market companies that provide products, services and solutions to government customers in industry sectors such as aerospace & defense, healthcare, technology, national security, communications, energy and education.
Overall, the Montana Board of Investments portfolio returned 3.9 percent for the third quarter and all pools had positive returns. Private equity allocation weights decreased slightly from 11.8 percent to 10.5 percent, due to a $138 million secondary sale and a reduction of excess liquidity. The private equity portion of the portfolio returned 4.7 percent overall for the third quarter.