LACERS commits $90 mln to 3 funds, bets big on EnCap

  • Commits $40 mln to EnCap Fund X
  • Commits $25 mln each to American Securities, BDCM
  • LACERS has 9 pct allocation to PE 

The $14 billion retirement system’s largest commitment went to Encap Energy Capital Fund X, a $6.5 billion oil and gas fund that closed in mid-April. LACERS committed $40 million to Fund X, managed by EnCap Investments, for investments in energy extraction and production teams, according to retirement system documents.

LACERS also committed $25 million each to American Securities’ latest flagship fund, a middle-market vehicle that closed on $5 billion in January, and Black Diamond Capital Management’s new opportunistic fund, targeting $1 billion for distressed investments in middle-market companies in the chemicals, farming, steel, forest products and hospitality industries, according to retirement system documents.

In January, LACERS released an alternatives investment plan that called for between $325 million and $350 million of new commitments to private equity in 2015. The retirement system will focus on increasing the portfolio’s exposure to small and middle-market funds, according to the plan.

While LACERS will continue to direct new commitments toward large and mega-buyout funds, it hopes to do so “selectively.” The retirement system plans to reduce its private equity portfolio’s exposure to larger vehicles from 40 percent to about 25 percent, according to the investment plan.

LACERS had a 9.3 percent allocation to private equity as of Dec. 31, according to retirement system documents. It was about 3 percentage points short of its 12 percent target allocation as of the same date.