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Blackstone buys ~$1 bln PE portfolio from LACERA

  • Blackstone is latest in line of buyers of big LP portfolios
  • LACERA is one of several public-pension sellers
  • Secondaries busy as year ends

Blackstone Group acquired a portfolio of private equity stakes valued at about $1 billion from Los Angeles County Employees’ Retirement Association, sources told Buyouts.

Greenhill Cogent was secondary adviser on the deal. Blackstone’s secondaries group, Strategic Partners, acquired the portfolio.

Exactly what’s in the portfolio is unclear. LACERA’s request for proposals said it had about 130 LP interests in funds valued at $1.4 billion connected to PE firms it no longer considered a core part of the system’s long-term strategy, Buyouts reported.

“LACERA is exploring a sale of all or a portion of those interests to streamline the portfolio, reduce administrative burden and to allow resources to be fully dedicated to key relationships,” the RFP said.  

A spokeswoman for Blackstone declined comment. Secondaries Investor earlier reported on the sale. 

LACERA’s PE portfolio had about $5.5 billion of net asset value as of April. The $56.8 billion retirement system held 9.9 percent of its assets in PE, close to its 10 percent target allocation.

Since the inception of its PE portfolio, LACERA made about $15.2 billion of total commitments, with $12.9 billion active and $2.2 billion exited as of Dec. 31, 2017, pension documents said.

Unfunded commitments came to about $4 billion as of that date.

The portfolio was generating a 16.09 percent net internal rate of return and a 1.66x total-value-to paid-in multiple since inception as of year-end.

LACERA’s sale is one of several wrapping up as the year comes to a close. Several large portfolio sales finished in recent days, including Florida SBA, which sold a portfolio valued at about $1.3 billion to Ardian, Buyouts reported.

And CPPIB acquired a portfolio valued at about $1.7 billion from Ontario Teachers’ Pension Plan, Buyouts reported.

The average high secondary bid for all funds was 93 percent of net asset value last year, a 400-basis-point increase from 2016, Greenhill Cogent said in its full-year 2017 secondary-volume report.

Action Item: Check out LACERA’s RFP here: https://www.lacera.com/Opportunities/RFP/pe_second_advisor/index.html