The Los Angeles County Employees’ Retirement Association (LACERA), which operates a $31.1 billion pension fund, is considering starting a PE co-investment program in which it invests $250 million over the next five years.
“We’re always looking at ways to improve the returns and get more bang for our buck,” says Christopher Wagner, a senior investment officer with LACERA’s alternative assets division.
LACERA issued a request for information (RFI) in late June seeking advisors for the program, and has received interest from a large number of firms, Wagner says. PE advisors have until Aug. 3 to send proposals to LACERA. Wagner expects the board to make a final decision on whether to proceed with such a program by the end of the year.
The RFI issued by LACERA asks qualified investment management firms to submit a proposed fee structure based on a $250 million initial program over a five-year period and growing to $750 million over 10 years.
LACERA has more than $1.6 billion, or roughly 5.3% of its funding, in alternative assets. The association’s alternative assets have $901 million invested in buyout funds, $260 million in VC funds, and the rest are divided among special situations, distressed and mezzanine debt, funds-of-funds and secondaries.