News & Analysis

Wisconsin sells stakes in Charterhouse tail-end funds

Hamilton Lane, Pomona and Northwestern Mutual all purchased parts of the interests in CCP VII and CCP VIII.

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The State of Wisconsin Investment Board (SWIB) has sold interests in two Charterhouse funds, according to UK regulatory filings.

The state pension fund, which is based in Madison, Wisconsin, sold 100 percent of its holdings in Charterhouse Capital Partners VII and Charterhouse Capital Partners VIII to a group of buyers. The group was made up of secondaries firms Hamilton Lane and Pomona Capital, as well as Northwestern Mutual Life Insurance, which purchased part of the stakes for its Group Annuity Separate Account, and NM Regal, a subsidiary of Northwestern.

Hamilton Lane bought the stakes through two funds: Hamilton Lane Private Equity Fund IX Holdings and Hamilton Lane Secondary Fund III. Pomona did so through its Pomona Capital VIII.

The size of the stakes, pricing and other terms of the transactions were undisclosed. SWIB, Hamilton Lane and Pomona declined to comment on these transactions. Northwestern Mutual and Charterhouse did not respond to requests seeking comments.

John Drake, senior investment officer in private equity at SWIB, told the audience at the Private Equity Exclusive conference in Chicago in July that SWIB has been tapping the secondaries market mainly for portfolio management.

“We’ve been using the secondaries market to keep the portfolio well managed,” he said, adding that one of the reasons it had sold some private equity fund stakes in the past is because some firms were charging high fees.

Charterhouse Capital Partners VII closed on €2.7 billion in 2002, according to data from PEI Media’s Research and Analytics division. According to a document from SL Capital, an investor in the fund, there were only three investments left in the fund as of 31 March, including travel assistance and financial services company Acromas. The fund had a net internal rate of return of 37.97 percent as of 31 March, according to data from the Washington State Investment Board (WSIB).

Charterhouse Capital Partners VIII closed on €4 billion in 2006, according to data from PEI data. It’s unclear how many portfolio companies were left in the fund, which had a negative net IRR of 0.58 percent as of 31 March, according to WSIB data .