From the looks of it, the Los Angeles County Employees Retirement Association could be one of the busiest limited partners in the industry this year.
The system needs to commit up to $1.8 billion to private equity this year to keep on pace to hit its long-term allocation target of 11 percent. Its actual allocation stands at around 8.6 percent, according to board materials. That commitment amount would continue at a relatively steady pace through 2019 with the 11 percent target in place, the staff report said.
However, the market is unpredictable so the estimates from investment staff can and do change. “The actual deployment of capital is dependent upon the availability of and accessibility to the world’s best managers executing proven strategies in attractive markets,” according to the staff report.
Some things the system will focus on in 2014 including signing on with some new, “top tier” venture managers, as well as making pledges to smaller buyout shops.
“Staff and the advisor will continue to pro-actively build and maintain long-term relationships in the venture area and continue to evaluate and leverage strategic and tactical means of investing with the very best managers,” the document said. LACERA’s staff particularly will look at venture managers focusing on tech areas like mobile, nanotechnology or genomics, as well as teams looking for opportunities in “emerging innovation hubs” in China, Israel, Poland and Brazil.
LACERA may also explore opportunities around secondaries, both to buy and sell, the documents said, as well as structures like funds of funds and separate accounts to get access to venture capital or small buyout shops.
In 2013, LACERA committed $952 million to 11 private equity funds, $100 million to its emerging manager program, run by JPMorgan Investment Management, and $300 million to its co-investment program, run by Morgan Stanley Investment Partners.
Its largest commitment, $150 million, went to Carlyle’s Fund VI – it also committed to CVC Capital Partners, Insignia Capital, Marlin Equity, MBK Partners, Onex Partners, RLH Investors, Silver Lake, Sterling Investment Partners and Union Square Ventures.
Photo courtesy of Shutterstock.