Los Angeles Fire and Police Pensions plans to commit $800 million to private equity funds this year, an increase of nearly $300 million over the previous year.
LA Fire’s steep increase in its planned commitments may provide welcome news for managers with funds in the market. The fundraising environment remains slow as many LPs are overallocated to private equity or face liquidity issues from reduced distributions.
The $30.7 billion system’s private equity consultant Portfolio Advisors outlined the system’s 2024 pacing plan and last year’s performance at its February 15 board meeting. Buyouts reviewed the presentation.
According to the presentation, $400 million is slotted for buyout funds, with $200 million intended for venture capital/growth equity funds and $200 million for special situations.
LA Fire currently allocates 17.1 percent of its total fund to private equity, above its 15 percent target, according to board documents.
Portfolio Advisors attributed the overallocation to the denominator effect, a slowdown in distributions and the portfolio’s $2.3 billion in unrealized gains.
Over half of those unrealized gains are held in funds with vintage years between 2013 and 2017, which are in distribution mode, the presentation said.
“Significant distributions in 2021 serve as a good example of what to expect when investment activity rebounds, hopefully in the next 12 months,” Portfolio Advisors said in its presentation.
The system’s portfolio generated $857 million in distributions in 2021, according to the presentation. In 2023, the portfolio brought back $444 million in distributions while managers returned $456 million in 2022.
Distributions have exceeded contributions for nine of the last 14 years, the presentation said.
If you do not receive this within five minutes, please try and sign in again. If the problem persists, please
email: