Washington commits $500m to M3's Evergreen fund

The state pension giant, among the most active in the market with about $77bn in assets, has invested $1.3bn to five managers including Evergreen Real Estate, KSL, Vestar, Lone Star and Sheridan Production Partners.

The Washington State Investment Board has committed more than $1 billion to private equity and real estate funds, including Evergreen Real Estate, Lone Star and leisure-focused firm KSL.

The board, which manages about $77 billion in assets, made a huge commitment of $500 million to Evergreen Real Estate Partners, the private equity real estate fund managed by Chicago-based M3 Capital Partners. The pension has committed a total of $2.5 billion with Evergreen since 2004, a spokesperson for WSIB told PERE.

The Evergreen fund has more than $2 billion in equity commitments, targeting value-add entity-level and joint ventures with with private real estate operating companies. According to the firm's website, it targets platform investments between $100 million and $300 million.

In total, the pension committed $1.3 billion to five managers, including a $300 million commitment to Lone Star's buyout vehicle, Fund VII, which has a $4 billion target for investments in residential distressed debt and acquisition of real estate-rich entities like banks.

WSIB also made commitments of $200 million each to Vestar Capital Partners VI, reportedly targeting $3.5 billion, and KSL Capital Partners III, reportedly targeting $1 billion. The leisure-focused private equity firm, 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. KSL’s 2006 second fund has generated a 10.2 percent IRR and a 1.14x total value multiple, according to the pension.

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. As of 30 September, the pension's real estate portfolio was valued at $7.6 billion, with roughly a fifth invested in residential assets, followed by 14.6 percent in industrial and 14.1 percent in healthcare.