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Washington board earmarks $1.55 billion for DB, eyes private equity, real estate for DC plans

Washington State Investment Board, Olympia, on Thursday committed to three new private equity funds and one real estate manager.

In private equity, the board committed up to $350 million to Green Equity Investors VII, managed by Leonard Green & Partners; up to $200 million to Technology Crossover Ventures IX and €225 million ($251 million) to Charterhouse Capital Partners X.

The board also authorized an additional commitment of $750 million to real estate manager Calzada Capital Partners. The external investment company manages real estate exclusively for the $104 billion Washington State Investment Board. The $750 million is being committed to existing placements of $4.07 billion at Calzada, said spokesman Chris Phillips. Calzada owns seven real estate operating companies under their management.

The board also approved terminating equity manager WHV Investments. The board had $200 million invested in a global equity strategy and decided to terminate the firm after the departure of the strategy's portfolio manager, Richard Hirayama, said Theresa Whitmarsh, executive director of the board.

Separately, the board approved a 2016 strategic plan that will include looking at whether the board should offer options for deferred compensation and defined contribution members to invest in private equity and real estate strategies. Ms. Whitmarsh said the idea would be to give deferred compensation and defined contribution participants the economic advantages of investing in the private equity and real estate asset classes. The board, with its defined benefit plan and other state investment pools, has been an early pioneer of investing in private equity, with investments dating back four decades.

Ms. Whitmarsh said in an interview that real estate and private equity sleeves could be added as choices for plan participants. She believes WSIB would be unique among plan sponsors if it offered such options. She expects a recommendation about how to proceed by the end of the year. She said WSIB has $13 billion in defined contribution assets and $4 billion in deferred compensation assets.