LPs

Los Angeles County commitments surge with $390 mln to three new funds

-
Los Angeles City Employees’ Retirement System, Bain Capital, private equity, pension fund
The skyline of downtown Los Angeles through a layer of smog is seen in the distance from a rooftop in Hollywood, California, May 31, 2006. U.S. environmental regulators proposed on January 7, 2010 stronger standards on lung and heart disease-causing smog that could cost industry up to $90 billion to implement. REUTERS/Fred Prouser/Files (UNITED STATES - Tags: ENVIRONMENT BUSINESS) - RTR28N0R
  • LACERA commitments surpass $1 bln
  • Almost a third of LACERA’s total commitments belong to 2014-2017 vintage funds
  • LACERA PE program valued at $4.9 bln

Los Angeles County Employees Retirement Association at its August meeting committed roughly $390 million to three new private equity funds, which could bring its total commitments for the year north of $1 billion.

Last week, the LACERA board of investments approved a commitment of up to $200 million to Onex Partners flagship buyout fund, along with up to 50 million euros ($59 million) to Waterland Private Equity and up to 100 million pounds ($128.8 million) to Alchemy Partners, Staff Counsel John Harrington told Buyouts. LACERA has already allocated roughly $686.5 million year-to-date.

Los Angeles County’s $52.5 billion retirement system committed a little less than $1 billion to PE and venture capital funds in 2016, a total it will likely surpass if the allocations approved at its Aug. 9 meeting are finalized.

More than half LACERA’s 2017 commitments went to Silver Lake and CVC Capital Partners, both of which closed their new megabuyout funds earlier this year. The retirement association also made commitments to Canaan XI, Glendon Opportunities Fund II, LAV Biosciences Fund IV and One Rock Capital Partners II earlier this year.

Los Angeles County Employees Retirement Association 2017 Commitments
Fund Name Commitment Date Vintage Year Strategy Commitment
LAV Biosciences Fund IV February 2017 Buyout $40 mln
Silver Lake V March 2017 Buyout $180 mln
One Rock Capital Partners II March 2017 Buyout $72.5 mln
CVC Capital Partners VII May 2017 Buyout $219 mln
Glendon Opportunities Fund II May 2017 Distressed $100 mln
Canaan XI TBD 2017 Venture Capital $75 mln
Source: LACERA

LACERA has committed more than $13.9 billion to PE since 1986, according to an investment report obtained through an open-records request. Almost a third of those commitments — $3.9 billion — went to funds raised over the past 3 1/2 years.

Even with the recent surge in commitments, LACERA was still below its 10 percent target allocation to the asset class as of June 30, according to a recent investment report. The retirement system has 9.3 percent of its assets in private equity.

LACERA’s PE program was valued at $4.9 billion as of June 30. The portfolio is netting a 16 percent internal rate of return since inception as of Dec. 31, surpassing its benchmark by a full percentage point.

Action Item: More on LACERA: www.lacera.com

The downtown Los Angeles skyline through a layer of smog is seen in the distance from a rooftop in Hollywood on May 31, 2006. Photo courtesy Reuters/Fred Prouser