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Private equity investments include securities that are not listed on a public exchange and are not easily accessible to most
individuals. These investments range from initial capital in start-up enterprises to leveraged buyouts of mature corporations. Private equity
investments are typically long-term commitments that may last up to 12 years or more. Although they are illiquid and perhaps more risky than publicly
traded investments, when employed consistently as part of a larger balanced portfolio, they can offer higher returns than traditional public equity
investments.
The WSIB’s private equity portfolio originated in 1981 and is invested primarily in limited partnerships. The partnerships, which are managed by a
general partner, acquire or create ongoing businesses or operating companies. Ultimately the companies are sold in the public market or to strategic
or financial buyers, and only then can the true return on investment be accurately measured.
To meet return and plan objectives, the WSIB’s private equity portfolio has diversified investments in a broad cross-section of sub-sectors, industries
and geographic regions including Washington and other northwest states.
Summary of private equity characteristics: |
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High risk asset class |
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Long-term time horizon (partnerships 10-12 years) |
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Illiquid asset class |
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Risks and illiquidity are compensated for by a higher expected return. |
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Portfolio Allocation by Industry Based on Market Value
As of September 30, 2007 |
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Portfolio Allocation by Strategy Based on Market Value
As of September 30, 2007 |
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| Click here for IRR |
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