LA County wants to commit $2 bln to PE this year

  • Buyout funds expected to get 65 pct of total
  • Represents $1.1 bln increase over 2014
  • Sees annual pace of $2 bln through 2018

Los Angeles County committed $885 million across 10 private equity funds in 2014, which was below its anticipated pace of $1.8 billion, according to an investment report made available by the retirement association. Although Los Angeles County fell behind the commitment pace it set for 2014, “staff maintained its objective to not dilute the quality of general partner relationships,” the report states.

The $51 billion retirement association found its way into some of 2014’s most in-demand funds, securing large allocations to Vista Equity Partners Fund V ($200 million), Energy and Minerals Group Fund III ($150 million) and Hellman & Friedman Capital Partners VIII ($125 million), according to the report.

LA County’s current allocation model calls for approximately $2 billion of commitments per year through 2018, at which point it plans to reduce annual commitments to $1.8 billion. The pacing plan will gradually increase the system’s private equity allocation from 8.7 percent to its 11 percent target.

That allocation model assumes roughly 65 percent of Los Angeles County’s commitments will go to buyout funds. Another 20 percent will go to special situations vehicles and the remaining 15 percent will be split between venture capital funds and co-investments, according to the report. The retirement association typically allocates between $75 million and $100 million per commitment.

Los Angeles County started investing in private equity in 1986. Its portfolio included 212 active investments managed by 105 general partners as of June 30, according to the report. The portfolio had generated a 16.4 percent return since inception as of the same date.