LACERA expands into Latin America by anchoring CVCI-spinout

Los Angeles County Employees Retirement Association made its first major foray into Latin American private equity by anchoring a first-time fund focused on investments in the region.

LACERA, with about $50 billion in assets, committed $125 million to Australis Partners’ debut fund last fall. Fund I, which launched last year, is targeting $350 million.

The fund has raised about $310 million so far and could close in the third quarter, according to a person with knowledge of the fundraising. Park Hill Group is working as placement agent on the fundraising.

Australis focuses on investments in Mexico, Colombia, Peru and Chile in middle-market companies with enterprise values exceeding $100 million, according to Australis’s website.

The firm has no restriction on what sectors it can target, other than looking at industries driving growth like consumer, energy, mining and hospitality, the website said.

“The middle class has been consistently expanding over several decades in these countries. That continues to happen,” said Enrique Bascur, a partner at Australis, during a panel discussion at an emerging markets conference in Washington in May.

“The need for infrastructure continues to be there. Also the need for energy continues to be there. In that environment, we think there are significant opportunities today.”

First LatAm commitment

The Australis commitment is LACERA’s first in Latin America, said Chris Wagner, senior investment officer in alternative assets at the firm.

“LACERA’s staff believes there are positive long-term sustainable market trends within the region that Australis will invest,” he said.

This is the third time LACERA has taken an anchor stake in a fund, Wagner said. All three were investments in spinout groups, he said.

“By serving as an anchor investor, LACERA is able to obtain significant access to and establish deep relationships with high-conviction general partners, while negotiating favorable terms,” he said.

Taking anchor stakes allows LACERA to write larger checks to fewer GPs, also part of the system’s strategy, according to David Simpson, investment officer in private equity at LACERA, who spoke on a panel at the IFC Empea Global Private Equity conference in Washington.

Expanding exposure to international private equity, including emerging economies in Asia and Latin America, is part of LACERA’s current investment plan.

Australis spun out from Citi Venture Capital International after that group was acquired by Rohatyn Group in 2013.

Australis’s partners include Bascur, Armando Borda, Cristian Celis, Alex Manzo and Juan Pablo Pallordet, according to a search of LinkedIn. Bascur was tapped as one of the senior leaders on the team after the Rohatyn acquisition.

Action Item: Contact Australis: mail@australis.com

Photo: A fishing boat is seen during a sunset in Mazatlan, Mexico, on December 27, 2012. Reuters/Stringer