The Washington State Investment Board kicked off the year with 100 percent transferal of its interest in Bridgepoint Europe V to BEV GP in February. The following month the WSIB allocated 28.93 percent of its $106.83 billion investment portfolio to alternative investments, with 16.48 percent specifically to private equity.
At the end of the first quarter, it had allocated 21.96 percent, short of its target 25 percent. During this period the board saw a 1.3 percent return on its private equity investments, an underperformance compared with the Russell 3000 benchmark.
There was $10.7 billion in unfunded commitments by the end of 2014.
So far this year, the pension fund has committed capital to four private equity funds. It invested $150 million in Insight Venture Partners' Growth-Buyout Coinvestment Fund, a $1.1 billion TMT co-investment vehicle focused on North America, Western Europe and Asia-Pacific. It also committed a whopping $300 million to TPG Growth III, a $3 billion globally diversified fund and $250 million to TA Associates' Fund XII, investing in the TMT, financial services, consumer goods, healthcare and business services sectors, following a TA presentation on its 180-day plans to accelerate portfolio company growth. Most recently it committed $150 million to the Western European buyout fund, Rhône Group's Fund V, focused on energy, oil and gas, industrials, consumer goods, healthcare, financial services and retail sectors. The fund has a €1.8 billion target and €2.5 billion cap.
In its 2 April board meeting, the committee recommended an investment of up to $500 million to Blackstone Capital Partners VII, which has a $15 billion target. The board hired Twin Creeks Timber on 26 June to manage a $300 million timberland mandate, which was approved at its 18 June board meeting. Board spokeswoman Liz Mendizabal told PEI this mandate along with its commitment to water infrastructure ISQ Cube Hydro Co-Investment Fund are two “new investments for the WSIB.”
Its private equity investments policy states the board should not consider committing to over 25 percent in a partnership and its investment focus is on Europe and the Pacific Rim. The board configured this policy in June 2012 and, following the guideline to revisit the policy every three years, most recently reviewed it at its 18 June board meeting.
On another note, the board, along with eight other US pension funds, petitioned the US Securities and Exchange Commission in March, demanding more diversity reporting requirements on public companies' boards. It was joined by other pension giants such as CalSTRS and CalPERS.
In light of cost-cutting strategies from various LPs, WSIB has jumped on board of severing ties with a number of its external fund managers for the coming years. ?