FROM: Don Pierce, Chief Investment Officer
SUBJECT: Patria Co-Investment Partnership Fund I
RECOMMENDATION:
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Recommend that the Board approve a €75 million commitment to Patria Co-Investment Partnership Fund I.
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BACKGROUND:
Patria Co-Investment Partnership Fund I (“PCPF I”) is the first European co-investment-focused fund launched by Patria Investments since the acquisition of the Abrdn Private Equity (“PE”) business in 2023. The co-investment strategy was originally established under Standard Life Capital in 2013 and has been led by Colin Burrow and Karin Hyland.
The strategy focuses on investing in companies with enterprise values below €500 million, generally categorized as lower-mid and mid-market companies. The Patria team sources these opportunities through private equity primary relationships built over 25 years of experience in European PE.
Since inception, the co-investment strategy has participated in more than 135 transactions, delivering a realized 21% IRR and a 2.2x net multiple. Performance details are provided in Table 1: Co-Investment Program Net Results.
Table1: SOF Investment Program Net Performance*
|
Fund Name & Size |
Vintage |
NET DPI |
NET IRR |
NET TVPI |
Realized NET TVPI |
|
Pre-Fund I - €223 million |
2013 |
1.7x |
15% |
1.8x |
1.9x |
|
Pre-Fund II - €652 million |
2017 |
1.1x |
14% |
1.8x |
2.2x |
|
Pre Fund III - €1,100 million |
2020 |
0.2x |
16% |
1.5x |
3.6x |
*Performance as of June 30, 2025
Staff and NEPC believe that PCPF is a compelling strategy and opportunity for SBCERA for the following reasons:
• Lower Middle Market: The lower middle market in private equity is generally inefficient, including in Europe. Investing in this segment provides opportunities to add value and generate strong returns.
• Portfolio Selection: Traditional private equity investing often includes significant blind-pool risk. The Co-Investment Team can selectively build the portfolio by making relative value judgements across investments and focusing on companies with strong fundamentals and proven cash flows. Investment opportunities are not limited by GP, fund, sector, or business specialization.
• Fees: Co-investments typically have minimal or no management fees and offer investors access to top-tier GP underwriting.
• Team: A seasoned and stable investment team with an established track record.
• Performance: The fund and strategy have demonstrated measured growth and improved capabilities with each successive vintage.
Co-investments in private equity are generally attractive, and SBCERA, as a seed investor, has negotiated key terms with the Patria Global Private Markets team to enable capital deployment under investor-friendly conditions, including favorable fees, fund terms, and advisory board participation.
The impact to SBCERA’s Private Equity Budget is highlighted in Table 2.
Table 2: Private Equity Budget and Allocations for 2025
|
Manager Allocations |
2025 |
|
Total PE Budget |
$650 MM |
|
|
Base |
YTD Add |
|
Adams Street Partners (ASP) MCA |
$75 MM |
- |
|
Industry Ventures MCA |
$50 MM |
- |
|
Kayne Anderson MCA |
- |
- |
|
Partners Group MCA |
$50 MM |
$175 MM |
|
Pathway Capital MCA |
$75 MM |
- |
|
Patria Co-Investment Partnership Fund I |
- |
$86 MM |
|
Patria SOF V |
- |
$25 MM |
|
Allocated PE Budget |
$250 MM |
$536 MM |
|
Unallocated PE Budget |
$400 MM |
$114 MM |
BUDGET IMPACT:
Investment Costs are deducted from Net Asset Value.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Amit Thanki
ATTACHMENTS:
Exhibit A: Patria Co-Investment Partnership Fund I Presentation
Exhibit B: NEPC Cover Memo
Exhibit C: Additional Staff Information (confidential)