Investments in Private Markets (State of Wisconsin Investment Board)
Summary
- SWIB invests Wisconsin Retirement System Core Fund assets across both public and private market investments.p.1
- Private market investments include assets such as private equity, venture capital, private credit, and real estate.p.1
- Investing in private markets offers potential for higher long-term returns despite lower liquidity compared to public exchanges.p.1
- Key advantages of private market investing include portfolio diversification, operational influence, scale advantages, and inflation protection.p.1
- SWIB manages specific risks associated with private markets, including illiquidity, premium manager fees, performance variation, lagged valuations, and leverage.p.1
Key insights
- Participating in private markets diversifies SWIB's portfolio as an increasing amount of business funding moves away from public markets.p.1
- SWIB's long-term investment horizon and predictable capital allow it to capture return premiums offered by less liquid assets.p.1
- Private market fund managers work closely with portfolio company management teams, providing greater operational influence and transparency than public market investing.p.1
- SWIB's overall scale enables access to top-tier external investment management talent.p.1
- Real estate and private credit generate stable, predictable cash flows while real estate adds inflation protection.p.1
- Valuations in private markets update less frequently and lag market events, requiring diligent monitoring for financial distress.p.1
Topics and entities
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