The Ohio-Midwest Fund has committed $11 million (€7 million) to two Ohio private equity fund managers, Early Stage Partners and Mistral Equity Partners.
The fund of funds, managed by Credit Suisse’s Customized Fund Investment Group, invests exclusively in private equity funds with a significant presence in the region.
Cleveland-based Early Stage Partners primarily provides early-stage funding to life sciences companies in Northeast Ohio. Mistral Equity Partners, which is based in New York with an office in Columbus, Ohio, makes buyout and growth investments in the consumer and media sectors.
The Ohio-Midwest Fund was established by the Ohio Public Employees Retirement System and Credit Suisse in 2005 to encourage business growth in Ohio and the surrounding area, while producing returns for the state pension fund.
The fund has $102 million under management, of which $2 million was contributed by Credit Suisse and the remainder by Ohio PERS. The fund size was expanded from $51 million to its present size in May 2007.
To date, the Ohio-Midwest Fund has committed $72 million to 12 funds. Previous commitments have been made to funds including Blue Point Capital Partners’ $400 million second middle market buyout fund and SFW Capital Partners’ $300 million debut fund. Additional middle market private equity investments were made in Stonehenge Opportunity Fund II and Strength Capital Partners II.
Venture fund commitments include Chrysalis Ventures’ third early stage venture fund, expansion-stage venture fund River Cities Capital Fund IV and early-stage biotech investor Triathlon Medical Ventures Fund. Commitments have also been made to the second seed- and early-stage technology funds of Reservoir Venture Partners and Draper Triangle Ventures, a network partner of Draper Fisher Jurvetson.
The current portfolio also includes Riverside’s debut micro-cap fund that closed in September 2006 on $250 million. The firm’s successor fund is targeting $400 million, according to the Probitas Partners 2008 Private Equity Deskbook.
Ohio PERS has $77.6 billion in assets under management. The pension’s Defined Benefit Fund has a 5 percent allocation to private equity. The Health Care Fund’s recently approved 5 percent allocation to private equity will take effect in 2008 with the aim of reaching its target within five to seven years.
The pension expects private equity returns between 6 percent and 14 percent in 2008 with a target return of 10 percent.