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LA Fire Narrows PE Adviser Search

The Los Angeles Fire & Police Pensions has winnowed down to nine the 19 responses it received to a spring RFP issued for a private equity adviser to fill the void left when it terminated Aldus Equity Partners.

The contenders are Cliffwater, Credit Suisse First Boston, Ennis Knupp, Hamilton Lane, Macquarie Funds Management, New England Pension Consulting, Portfolio Advisors, Stepstone Group and Wilshire Associates. Pension fund staff and its general consultant, Pension Consulting Alliance, are vetting the firms by calling their clients and references.

In June, the staff recommended that the board change from having two private equity advisers to having only one that will advise it on both the core and specialized parts of its private equity portfolio. The staff also recommended that the board establish criteria for fund selection, rather than leave that to the advisers. As long as the potential pledge fits the minimum criteria and the adviser feels it’s appropriate, the investment would garner board approval. The board has not yet decided how it wants to handle those suggestions.

The pension fund’s private equity program has two components, a core portion that includes venture capital, buyout and special situation funds; and a specialized component earmarked for commitments to first-time funds, smaller funds focused on niches, and funds run by emerging managers. Roughly 80 percent of new commitments go to the core portfolio and 20 percent to the specialized one, which StepStone Group now runs on a nondiscretionary basis.

Meantime, the pension fund has also put its general consultant role up for re-bid. Along with incumbent Pension Consulting Alliance, the candidates are Callan Associates, Mercer, New England Pension Consultants, R.V. Kuhns and Associates and Wilshire Associates.

The Los Angeles Fire and Police Pensions manages $12.5 billion, with a 10 percent target allocation to private equity and a 5 percent actual allocation to the asset class.