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LA Fire and Police backs Ares, Apollo

  • $18.4 bln pension completes three commitments in December
  • LA Fire and Police also backs CenterGate debut
  • Pension’s PE portfolio netting 11.1 pct IRR

The Los Angeles Fire and Police Pensions committed $55 million across three private equity funds in December, according to pension commissioners’ meeting materials.

Los Angeles Fire & Police allocated $25 million to Apollo Global Management’s second natural resources fund, which is targeting $3 billion for investments in energy, mining and agriculture.

The firm held a first close on $1.3 billion in the third quarter, Senior Managing Director Josh Harris said in an earnings call. As of early January, the fund raised approximately $1.7 billion, according to an SEC filing.

The $18.4 billion pension system also allocated up to $25 million to Ares Corporate Opportunities Fund V, which will invest in distressed companies and traditional buyouts, according to New Mexico State Investment Council documents. Ares set a $6.5 billion target for Fund V.

Ares Management’s previous fund was netting an 11.4 percent internal rate of return and 1.12x multiple as of June 30, according to New York City Employees’ Retirement System documents.

Los Angeles Fire and Police also committed $5 million to CenterGate Capital, an HIG Capital spinout led by Tiffany KoschStenning Schueppert and Lewis Schoenwetter. CenterGate is approximately halfway toward its $300 million target as of early January, one market source told Buyouts. The debut fund also received a $10 million commitment from Los Angeles City Employees’ Retirement System.

The Los Angeles Fire and Police Pensions launched its private equity program in 1996, according to pension documents. The strategy delivered the pension an 11.1 percent net IRR and 1.48x multiple as of June 30. LAFPP valued its private equity portfolio at $1.56 billion as of the same date.

Action Item: To learn more about Los Angeles Fire and Police Pensions’ private equity portfolio, visit http://bit.ly/1Ouob2z