The New Jersey Division of Investment approved a $400 million add-on investment to SONJ Private Opportunities Fund II, a co-investment mandate managed by BlackRock Private Equity Partners, said spokesman Andrew Pratt.
SONJ II was launched in 2007. The fund has a broad mandate, investing in private equity, venture capital, growth capital, buyouts, recapitalisations, distressed debt and mezzanine. The strategy also includes co-investments, primary fund commitments and secondaries, according to Division of Investment documents.
New Jersey began its partnership with BlackRock in 2006, according to documents. The SONJ series of separate accounts were designed to take advantage of private equity co-investment opportunities sourced by the Division of Investment and BlackRock.
To date, SONJ II has generated a 14.9 percent net internal rate of return and 1.25 multiple, according to documents.
New Jersey negotiated terms for the add-on that include an 8 percent preferred return on 10 percent carry, a 0.25 percent management fee on venture capital investments and a 0.75 percent management fee on co-investments and secondaries, according to documents. The add-on also includes a European style waterfall structure, in which all fees, plus the preferred return, must be returned to the Division of Investment before BlackRock can collect carry.
“We believe this is a prudent investment. Past performance indicates that this fund was well-managed,” Pratt said. “The ability to co-invest with BlackRock is a really important component of our … investment pool.”
Key investment professionals on SONJ II include managing director Russell Steenberg, chief investment officer Lynn Baranski and managing director Jay Park, according to New Jersey documents.
BlackRock was founded in 1988 and has $3.5 trillion in assets under management. In addition to its private equity business, BlackRock also offers fixed income, equity, real estate and multi-asset class strategies.