Fund performance: Secondaries take the lead in Hawaii’s growth portfolio

Three small secondary purchases top a portfolio of late-vintage growth funds at Hawaii Employees’ Retirement System, though funds from Summit Partners and Abraaj Capital also stand out.

The portfolio of funds from vintages 2011 to 2016 is weighted toward large pools of capital. More than half the 10 funds are $1 billion or larger, and in several cases much larger. Included is TA Associates’ monstrous $4 billion 11th fund.

Not surprisingly, several tiny secondary purchases had the best IRRs in the portfolio as of March, a recent performance report shows. Each was purchased six years after the fund was formed, and two of the three had commitment levels below $1 million, so their overall impact on the portfolio is minimal.

Beyond the secondaries, one fund with a respectable IRR is Summit Partners Growth Equity Fund VIII from 2012, which had an IRR of 14.64 percent as of March, the report shows.

The $3.1 billion fund invested in Mo Industries Holdings and MPP Holdings, which were both acquired for undisclosed prices, according to Thomson Reuters.

Not far behind is Abraaj Global Growth Markets Strategic Fund from 2015, which is off to a good start with an IRR of 13.12 percent as of March.

ABS Capital Partners VII also has an IRR in the double digits, the report shows.

Performance data for the entire portfolio is available in the attached spreadsheet, with commitments, distributions and IRRs.

Download Data in Excel: Hawaii ERS growth equity portfolio (2011 to 2016)

A sailboat passes in front of clouds lit up by the sunset sky off Waikiki in Hawaii on Dec. 30, 2016. Photo courtesy Reuters/Kevin Lamarque

CORRECTION: Due to an editing error, the previous data file attached to this fund performance review was incorrect.