Washington State Makes $1.6 Billion in Private Market Commitments

The new commitments are part of the plan to keep private market investments to around 40% of the fund.

The Washington State Investment Board (WSIB) has committed up to $1.6 billion in new private market investments, spanning private equity, tangible assets, and real estate.

The $99.4 billion pension plan already has among the highest commitments percentwise to private markets of any public US pension plan: 20.27% of plan assets to private equity, 16.71% to real estate, and 4.7% to tangible assets. Consequently, it has one of the lowest equity exposures, just 31%.

Agenda material and a WSIB release after the board’s February 21 meeting show that the board is moving into new funds as existing commitments expire in efforts to keep up the high private markets exposure. The illiquid investments have helped the WISB beat the returns of many of its peers in the institutional investment world in the long- and short-term. In the fiscal year ending June 30, it had returns of 10.4%.

New private market investments approved by the board include:

  • An up to $200 million commitment in TSSP Capital Solutions, L.P., a special situations private equty investments fund that is being raised by TPG Sixth Street Partners. The fund has a target size of $2 billion.
  • An up to $200 million commitment to a new private equity investment strategy with one of WISB’s existing private equity general partners. The name of the partner and details of the investment strategy were not disclosed.

Investment staff also approved the following private equity investments using delegated authority to make investments without approval of board members:

  • An investment of up $300 million in Trident VIII, a buyout fund focused on the financial services industry in North America and Western Europe. The fund, which will be managed by Stone Point Capital, has a $5.75 billion target size.
  • An investment of up to $200 million in the Menlo Special Opportunities Fund, being raised by venture capital firm Menlo Ventures. The fund has a target size of $500 million and will invest in early-growth and late-stage investments.
  • An investment of up to $250 million in the Rise Fund II, a growth equity and middle market fund being raised by TPG Capital. The fund has a hard cap of $3 billion. It is the largest so-called impact fund being raised to date, aiming to make socially responsible investments that can deliver market returns. WISH had previously invested in the Rise Fund, a $2 billion investment fund, that is still in the process of taking stakes in socially responsible businesses.

In the area of tangible assets, the WISB board approved an additional $200 million commitment to Geronimo Renewable Infrastructure Partners, a North American renewable energy fund. This is the WSIB’s second investment in the fund after a $300 million commitment in 2017.

The WISH board, which runs its real estate program through a series of real estate partnerships and operating companies, gave new capital of $250 million to a new company, Crane Capital. It also gave Crane another $400 million that was overseen by Evergreen Real Estate Partners.

Evergreen manages more than $5 billion for WSIB. It received a $500 million follow-on commitment from WSIB in December, shows a system press release.

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Washington State Makes New Private Market Commitments

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