Washington commits $1.3bn to 5 GPs

The state pension giant, among the most active in the market with about $77bn in assets, has committed to KSL, Vestar, Lone Star, M3's Evergreen Real Estate fund and Sheridan Production Partners.

The Washington State Investment Board has committed more than $1 billion to private equity and real estate funds, including Vestar, KSL and Lone Star.

The board, which manages about $77 billion in assets, approved commitments of $200 million each to Vestar Capital Partners VI, reportedly targeting $3.5 billion, and KSL Capital Partners III, reportedly targeting $1 billion. KSL had raised $27 million as of 15 November, according to the US Securities and Exchange Commission.

Vestar and KSL are re-ups for Washington State. The pension committed $20 million to Vestar’s third fund in 1997 and $55 million to the firm’s fourth fund in 1999. As of 30 June, Vestar III was generating a 1.27x total value multiple and a 4.6 percent internal rate of return, while Fund IV has produced a 1.70x total value multiple and a 14.4 percent IRR, according to performance data from Washington State.

KSL’s 2006 second fund, meanwhile, has generated a 10.2 percent IRR and a 1.14x total value multiple, according to the pension.

The board also committed $300 million to Lone Star VII, which has a $4 billion target for investments in residential distressed debt and acquisition of real estate-rich entities like banks.

In real estate, the board also made a huge commitment of $500 million to M3 Capital Partners' Evergreen Real Estate Partners fund. The pension has committed a total of $2.5 billion with Evergreen since 2004, a spokesperson for WSIB told PEO.

Finally, the pension committed $125 million to Sheridan Production Partners II, a Warburg Pincus joint venture fund targeting $1.3 billion for investments in US oil and gas producing properties. Sheridan has been attracting some big commitments from US public pensions, including Oregon and New Jersey.

Washington State has been one of the most active LPs this year, committing to firms like Southern Cross Group, GTCR and Littlejohn. In June, WSIB named Hamilton Lane as its private equity advisor, replacing Capital Dynamics.

The pension’s private equity portfolio, which was launched in 1981, had a market value of $14.2 billion as of 30 June.