- Assets under management: $22.2 bln
- PE portfolio: $2.08 bln
- PE allocation vs target: 9.36 pct against 12 pct
- Why this is important: Smaller LPs may end up not getting preferred commitment levels in oversubscribed funds
Los Angeles Fire and Police Pensions committed $66 million across three private equity funds, including a reduced $18.5 million to Platinum Equity’s debut small-cap fund after the firm cut back the system’s desired allocation, pension documents showed.
LAFPP originally wanted a $20 million commitment to the fund, which closed at its hard cap of $1.5 billion this month.
LAFPP also made a commitment of $40 million to Thoma Bravo’s 13th fund targeting $10 billion.
LAFPP’s third private equity commitment of $7.5 million was to Reach Capital’s sophomore fund that is aiming to raise $75 million. Reach Capital is a venture capital fund that invests in early stage companies in education technology.
Reach’s first fund raised $53 million in 2015; through the fund, the company intended to invest $400,000 in seed funds and up to $3 million in Series A and Series B deals.
The $22.2 billion LAFPP had a private equity allocation of 9.37 percent against a target allocation of 12 percent, as of Dec. 31, 2017, according to pension documents.
Buyouts made up 48 percent of the $2.08 billion private equity portfolio, venture capital was 25 percent and special situations represented 28 percent of the LAFPP private equity portfolio, as of Dec. 31,2017, pension documents said.
LAFPP’s largest GP relationship is with its private equity consultant Portfolio Advisors. Other relationships include Abbott Capital, Hamilton Lane, Fairview Capital Partners, Pension Consulting Alliance, Stepstone Group, Transition Capital Partners and Aldus Equity.
LAFPP also recently committed up to $135 million to three real estate funds for its $1.88 billion real estate portfolio, according to pension documents.
It committed $50 million to Almanac Realty Securities’ eighth fund that is expected to raise $1.5 billion. The fund provides capital to private and public companies that own and operate real estate.
In addition, LAFPP committed $50 million to Heitman’s debut Asia-Pacific-focused fund that will look to make property-level joint ventures with public and private real estate companies.
LAFPP also re-upped $35 million to Unico Properties’ core plus partners’ fund. It had earlier committed $29.5 million to its Unico Partners first fund that raised $265 million in 2015. Unico Properties is a real estate firm focused on investments in office, mixed-use and multifamily properties.
LAFPP’s real estate portfolio had an actual allocation of 8.48 percent versus a target of 10 percent, as of June 30, 2018. It has a target allocation of 30 percent to public real estate and 70 percent to private real estate.
The private real estate portfolio is managed through separate accounts by AEW and Neptune Building and commingled funds.
Action Item: Read more on LAFPP’s investments here https://bit.ly/2uHtJ63