Washington State bets big on Advent, Nordic

The Washington State Investment Board re-upped almost $800m to two of its more established fund managers: Advent International and Nordic Capital.

The Washington State Investment Board committed around $800 million to private equity at its meeting Thursday, investing $400 million in Advent International GPE VII and €320 million in Nordic Capital Fund VIII, a pension system spokesperson told Private Equity International

Washington State is a longtime investor in both firms, having committed €100 million to Advent’s sixth international fund in 2008 and $125 million across two other firm vehicles. Advent’s seventh international fund launched earlier this year and is targeting €7 billion for investments in European and North American upper mid-market companies. The firm typically focuses on five core sectors, which include business and financial services, healthcare, industrial, retail/consumer and technology, media and telecoms. 

The firm’s sixth international fund, a €6.6 billion 2008 vintage, was generating a 1.1x total value multiple and a 6.88 percent net internal rate of return as of 31 December, according to Washington State documents.  

In addition to its international fund series, Advent also maintains several dedicated regional and sector-specific funds for private equity investments in Latin America, Central and Eastern Europe as well as healthcare and life sciences. 

The $85 billion retirement system also has an extensive history with Nordic, with which it has had a relationship since 1998, the spokesperson said. Nordic is targeting between €4 billion and €4.5 billion for its fund, which will invest in large and mid-market companies in Sweden, Norway, Finland, Denmark and Germany. 

Nordic Capital Fund VII, a €4.3 billion 2008 vintage, was generating a 0.8x total investment multiple and a negative 14.56 percent net IRR as of 31 December, according to Washington State. 

The firm was founded in 1989 and maintains offices in Copenhagen, Frankfurt, Helsinki, Jersey, London, Luxembourg, Oslo and Stockholm. 

Washington State has been investing in private equity for more than 30 years, which has allowed the retirement system to establish itself as one of the largest public pension investors in the asset class. Washington State’s private equity portfolio is valued at $15.7 billion, good for 18.5 percent of its total investment allocation.  

In February, Washington State committed more than $1 billion across three funds managed by Warburg PincusKohlberg Kravis Roberts and Oaktree Capital Management