The Washington State Investment Board adds two new funds to its private equity investment portfolio/Issues RFP for International Equity Managers (October 17, 2003) Olympia - The Washington State Investment Board approved investments in two new private equity funds that will target buyouts of undervalued firms and technology companies. The WSIB will invest $175 million in TPG Partners IV, LP, a private equity fund managed by Texas Pacific Group with a target size of $4.5 billion. Three years ago, the WSIB invested $82 million TPG Partners III, LP which resulted in annual net gains of 12.4 percent. The Board approved the new fund investment based on TPG’s strong track record and the opportunity to expand a successful and proven general partnership. "TPG's talented and experienced management team has demonstrated exceptional competence in finding value in complex transactions and turnarounds of distressed companies that other firms have avoided," said WSIB Executive Director Joe Dear. "This TPG investment, along with the Board’s approval today of $125 million to be invested in a new fund managed by Silver Lake Partners, LP, are extremely attractive and promising opportunities to bolster returns for state pension members and beneficiaries." As mentioned, the WSIB also approved the investment of $125 million in Silver Lake Partners II, LP, a new fund with a $3 billion target that will focus exclusively on companies in the technology sector. As with TPG, the WSIB is an existing investor with Silver Lake Partners, having committed $60 million to the firm’s first fund, SLP I, in 1999. As of June 30, SLP I had a net 25.2 percent internal rate of return for the WSIB and other fund investors. "Despite a very difficult technology investment environment over the past few years, SLP has achieved remarkable success and strong returns," said Dear. "Over the long-term our portfolio will benefit from the expertise of firms like Silver Lake that are well-positioned as strong leaders in their respective industries. The TPG and Silver Lake investments were approved by the WSIB contingent upon satisfactory negotiations of terms and conditions. In other action, the WSIB is conducting a competitive search for managers for its entire $5.3 billion developed markets international equities mandate, which includes active, enhanced index, and passive. Current manager contracts expire June 30, 2004. Incumbent managers are eligible to bid. The process is being managed by the WSIB and investment consultant Callan Associates is assisting with the search. The WSIB manages investments of about $40 billion in Washington's public employee pension assets. In 2001, the WSIB increased the private equity target allocation for the total pension fund portfolio from 15 to 17 percent. Currently private equity represents about 14 percent of that portfolio.