The State of Wisconsin Investment Board is planning to allocate $1 billion to private equity investments this year, but has set the bar high for both existing and new relationships with GPs.
The board will focus on several criteria for commitments this year, including looking for smaller funds, growth equity and debt strategies, funds that are sector focused and managers that target emerging markets, according to a strategic review of the private equity programme at a meeting in May.
The pension has target allocation of 6 percent to private markets and debt. SWIB had an actual allocation to private markets and debt of about 11.9 percent in 2009, with about $4 billion in assets. The pension board collected $292 million in distributions last year, and paid out $654.7 million in capital calls.
Last year, SWIB had a target for private equity commitments of $1.3 billion, but ended up spending only $1 billion. The pension board committed mostly to existing managers, investing $875 million to existing GPs, and $160 million to three new GPs.
SWIB focused on debt last year, and committed $415 million to seven GPs in the space, including $250 million to three distressed debt funds and $115 million to three mezzanine funds.
The pension board has made at least one private equity commitment this year, sending $50 million to Sterling Group Partners’ third fund, which closed on more than $800 million.