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Emerging firm 1315 Capital scores pledge from LA City for its third fund

LA City’s commitment is an example of a public pension system finding opportunities with newer funds and emerging managers.

Niche healthcare emerging manager 1315 Capital is seeking to raise $350 million for its third fund and recently earned a $30 million commitment from Los Angeles City Employees’ Retirement System.

LA City’s commitment is an example of a public pension system finding opportunities with newer funds and emerging managers despite the general preference of public system LPs to stick with established managers.

1315 Capital’s co-founding partners are Adele Oliva and Michael Koby, according to the firm’s website. Oliva was previously the co-head of US Healthcare at Apax Partners before moving to Quaker Partners in 2007. Koby was previously the managing director at Palm Ventures, a private-equity focused family office.

1315 Capital started in 2014 and has raised $500 million from two previous funds, the firm’s website said.

LA City committed $10 million to 1315 Capital’s first fund and $10 million to 1315 Capital Fund II, according to documents from the $22.9 billion pension fund.

According to documents from LA City, 1315 Capital is also seeking to raise $150 million for its 1315 Capital Early Growth Fund.

1315 Capital III will focus on commercial-stage companies with at least $10 million in net revenue and seeks to create a portfolio of 11 to 14 investments ranging from $14 million to $30 million, according to LA City documents.

Some companies in 1315’s portfolio include Biocoat, which provides coatings to medical device manufacturers, benefits provider Homestead Smart Health Plans and MiraDry, which provides a treatment to reduce excessive armpit sweat.

In addition to 1315 Capital III, LA City also announced six other commitments.

These include a $25 million commitment to Lightbay Investment Partners II; $80 million to Thoma Bravo Fund XV; $45 million to Thoma Bravo Discover Fund IV; $40 million to HG Saturn 3A; $50 million to Francisco Partners VII; and $17.5 million to Francisco Agility Partners III.

Correction: An earlier version of this story contained a misspelling of Adele Oliva’s name. The report has been updated.