Emerging managers crush expectations for Los Angeles County pension

  • LACERA emerging PE program nets 19.7 pct
  • Benchmark netting 15 pct as of same date
  • JPMorgan accounts include 35 investments

Los Angeles County Employees Retirement Association’s $250 million portfolio of emerging-manager funds hurdled its benchmark, netting a 19.7 percent internal rate of return and 1.5x multiple through March 31, according to a recent JPMorgan report.

The portfolio has returned a 1.5x multiple on invested capital since inception, the report showed. LACERA’s benchmark, the Russell 3000 index plus 5 percentage points, netted a 15 percent IRR and 1.3x during the same period.

JPMorgan has managed the $48 billion retirement association’s emerging-manager portfolio since 2010. LACERA EM I, a $150 million fund invested from 2010 to 2013, netted 19.2 percent with a 1.5x multiple, according to the report. A $100 million re-up JP Morgan invested in 2014 and 2015 vintage funds netted a 25.1 percent IRR with a 1.3x multiple.

The combined portfolio includes 35 investments, including co-investments, the bulk of which went to traditional PE buyout funds. The portfolio also includes stakes in eight venture capital vehicles and one secondary fund, the report said.

More than two-thirds of the portfolio’s investments went to firms with women or minority ownership.

Ashmi Mehrotra and Laureen Costa of JPMorgan presented the portfolio’s returns at LACERA’s July 13 meeting.

JPMorgan and LACERA staff could not be reached for comment.

The performance of LACERA’s emerging-manager program compares favorably with that of its overall private equity portfolio, pension documents said. The $4.3 billion portfolio netted a 16.1 percent IRR and 1.66x through Dec. 31.

Be sure to check out pehub.com this week for more coverage of emerging managers. PartnerConnect’s Emerging Manager conference will be held tomorrow, July 19, at the Harvard Club in New York City.

Action Item: Register for Emerging Manager Connect: https://partnerconnectevents.com/