CPPIB general partner Q1 2007 performance numbers part 2

You might recall the post about Canadian general partner (“GP”) performance (see “CPPIB general partner Q1 2007 performance numbers”, August 26-07) showing the performance results that the Canada Pension Plan Investment Board (“CPPIB”) put up on their website. Time for a look at select U.S. GP figures for March 31, 2007 (CPPIB’s fiscal year ends in April btw, so they don’t call it Q1. But it is Q1 on the calendar to me):

The figures that follow cover four categories: CPPIB’s commitment, paid-in-capital (which tells you how much of the fund is invested in deals and/or drawn to pay management fees) reported value, and reported value + distributions (which tells you what the notional simple return of the fund is against the paid-in-capital figure). That figure is based in large part on what the manager believes the portfolio is worth as at March 31, 2007, subject to GAAP fair value accounting. MM equals millions:

Apollo Investment Fund V (2002): $150MM, $122.5MM, $101.1MM, $362.2MM; 195.7% increase

Apollo VI (2005): $400MM, $76.9MM, $66.6MM, $73.8MM; 4.0% decrease

Blackstone Capital Partners IV (2002): $200MM, $144.2MM, $193.4MM, $365.7MM; 153.6% increase

Blackstone Capital Partners V (2005): $406.7MM, $142.7MM, $164.6MM, $152.9MM; 7.1% increase

Carlyle Venture Partners II (2002): $60MM, $57.8MM, $42.3MM, $62.5MM; 8.1% increase

CSFB Mid Market Opportunity Fund (2003): $140MM, $55.5MM, $69.2MM, $77.9MM; 40.4% increase

CSFB Mid Market Opportunity Fund II (2005): $300MM, $16.3MM, $11.8MM, $12.3MM; 24.5% decrease

Heartland Industrial Partners (2001): $150MM, $140.4MM, $62.1MM, $64.7MM; 53.9% decrease

Hellman & Friedman Capital Partners V (2004): $ 75MM, $64.3MM, $96.5MM, $99.2MM; 54.3% increase

JP Morgan Partners Global Investors (2001): $175MM, $154.6MM, $ 120.7MM, $199.3MM; 28.9% increase

JP Morgan Partners Global Investors (Selldown) II (2006): $317.4MM, $284.6MM, $245.1MM, $332.4MM; 16.8% increase

KKR Millenium Fund (2002): $300MM, $271.7MM, $296.1MM, $448.2MM; 65.0% increase

Lehman Brothers Venture Partners 2003 (2003): $75MM, $47.7MM, $54.1MM, $54.4MM; 14.0% increase

MidOcean Partners (2003): $273.1MM, $255.5MM, $79MM, $573.8MM; 124.6% increase

MPM BioVentures III (2002): $75MM, $68.9MM, $51.4MM, $82.2MM; 19.3% increase

Paul Capital Holdings (2002): $81MM, $73.1MM, $52.1MM, $154.3MM; 111.1% increase

Paul Capital Holdings II (2004): $120MM, $101.8MM, $99MM, $203.2MM; 99.6% increase

Paul Capital Partners VII (2001): $90MM, $83.4MM, $44.7MM, $135MM; 61.9% increase

Paul Capital Partners VIII (2004): $100MM, $58MM, $58.4MM, $71MM; 22.4% increase

Paul Capital Top Tier II (2002): $96MM, $61.5MM, $54.7MM, $62.2MM; 1.1% increase

Paul Capital Top Tier Investments III (2005): $160MM, $30.4MM, $30.3MM, $30.6MM; 0.7% increase

Performance Venture Capital (2005): $185MM, $20.1MM, $16.6MM, $22.2MM; 10.4% increase

Providence Equity Partners VI (2006): $400MM, $17.2MM, $16.5MM, $16.5MM; 4.1% decrease

Silver Lake Partners II (2004): $100MM, $80.1MM, $95.5MM, $116.3MM; 45.2% increase

Silver Lake Partners III (2006): $500MM; nil, nil, nil

Thomas Weisel Partners GGP II (2003): $50MM, $29.6MM, $32.6MM, $41.1MM; 38.9% increase

TPG Partners (2003): $100MM, $88.5MM, $111.8MM, $154.2MM; 74.2% increase

TPG Partners V (2006): $500MM, $129.5MM, $132.4MM, $132.4MM; 2.2% increase

Welsh, Carson, Anderson & Stowe X (2005): $200MM, $58MM, $58.6MM, $58.6MM; 1.0% increase

Some of the increases in value look fabulous, and they are. The currency will be a concern for the CPPIB unless the US$ exposure to these funds was removed via a swap at the time of each drawdown. Or, assuming that none of these proceeds are needed to satisfy current pension needs, there’s no reason to convert them back to C$. The proceeds of one US$ fund could be rolled over into a new commitment.

Without the cash flows it is impossible to get to the IRRs of these funds. But simple return is easy. Take the growth in the investment, and divide by the number of years since the first commitment. That’s not precise either, as not every dollar is funded at day one of course. But, as many of these increases in value are “reported” versus realized, it’s worth doing the exercise: a 40% increase by a 2003 vintage fund is superior to a 40% increase by a 2001 vintage fund.

Some noteables:

Apollo 2002: 39.1% annual simple return for 5 years

Blackstone IV 2002: 30.7% annual simple return for 5 years

Carlyle Venture Partners 2002: 1.6% annual simple return for 5 years

CSFB mid market 2003: 10.1% annual simple return for 4 years

Heartland Ind. Partners 2001: -9.0% annual simple return for 6 years

Midocean Partners 2003: 31.1% annual simple return over 4 years

MPM Bioventures 2002: 3.9% annual simple return over 5 years

Paul Capital 2002: 22.2% annual simple return over 5 years

Paul Capital Holdings 2004: 33.2% annual simple return over 3 years

Paul Capital VII 2001: 10.3% annual simple return over 6 years

Paul Capital VII 2004: 7.5% annual simple return over 3 years

Thomas Weisel Partners 2003: 9.7% annual simple return over 4 years

TPG Partners 2003: 18.6% annual simple return over 4 years

MRM