Side Letter: SoftBank picks Goldman, Alaska’s model, New Jersey’s PE faith

Want to pick co-investment opportunities that will outperform your private equity portfolio by thousands of basis points? Alaska Permanent tells us how. Here’s today's brief, for our valued subscribers only.

Just happened

Source: Masaru Kamikura

Goldman’s Vision

SoftBank has selected Goldman Sachs to raise its second $100 billion mega-fund, according to Bloomberg. The Japanese tech giant led by Masayoshi Son (pictured) has already held talks with sovereign wealth funds from Singapore, Saudi Arabia, Abu Dhabi, Kazakhstan and Oman and is expected to begin formal discussions with potential investors next month. It will aim to close by March 2020.

Vision Fund had generated a 45 percent net equity internal rate of return and 29 percent net blended IRR as of March, per SoftBank’s latest earnings.

A sign of the times

May’s five largest funds collected nearly $24 billion between them – three times more than the five largest capital raises in April. The Seventh Cinven Fund, which raked in €10 billion against an €8 billion target, was the largest fund closed last month, according to PEI data. Two funds in the list stand out as following strategies LPs are attracted to: technology and impact investing. Of course, Advent International’s $17.5 billion haul for Fund IX, announced in early June, gives the $24 billion total a run for its money.

The Alaska model

Looking for a good model for your co-investment programme? You could do worse than to follow in the footsteps of Alaska Permanent Fund. In the latest instalment of our co-investment deep-dive, we talk to CIO Marcus Frampton and head of alternatives Steve Moseley about how the sovereign fund approaches the strategy, which so far has outperformed the rest of Alaska’s private equity portfolio by “a couple thousand basis points”.


New Jersey draws a line through uncertainty. The state’s Division of Investment is increasing its target private equity allocation to 12 percent from 10.25 percent in a move that could signal the end to an uncertain future for the asset class in the state. Following Governor Phil Murphy’s campaign, in which he called out private equity and hedge fund fees, new manager engagement, commitments and recruitment for the state’s top performing asset class were on hold. This caused one GP we spoke with to question the pension system’s “ability to be a reliable partner”.

CPPIB and Whitehorse. Our profile of Canada Pension Plan Investment Board’s secondaries team in February is one of our most read stories of the year and counting. We guess this is because readers want to know more about the hotshot individuals behind one of the sophisticated pension’s most creative teams. Now one of those individuals – Toronto-based principal Sebastien Siou – has jumped ship. Read where he’s gone on sister title Secondaries Investor.

Inside tip

Update: yesterday we reported Michael Collins was leaving industry body Invest Europe as its chief exec. He’ll be joining the London office of M&G Prudential to spearhead government relations, he told PEI on Tuesday.

Dig deeper

High five from Texas. Employees Retirement System of Texas has agreed to commit $385 million to five private equity funds, including $125 million to Crown Asia-Pacific Private Equity IV. Here’s a breakdown of the $28.7 billion US public pension’s investment portfolio. For more information on ERS and more than 6,700 other institutions, check out the PEI database.

They said it

“I told my husband: ‘Please don’t get a speeding ticket, because somebody’s going to find out that you have speeding tickets and it’s going to be part of the due diligence process’.”

A panellist at the Private Debt Investor CFOs & COOs Forum in New York quips about the increasing emphasis investors are putting on transparency, reporting and due diligence.

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Today’s letter was prepared by Isobel MarkhamAdam LeCarmela MendozaRod JamesAlex Lynn and Preeti Singh.

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