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LACERS expands Vista relationship

  • LACERS commits to Vista for fifth time
  • Previous Vista commitments net an aggregate IRR of 26.5 pct
  • Allocates 22 mln euros to Astorg’s new mid-market fund

Los Angeles City Employees’ Retirement System committed roughly $55 million across a pair of new private equity funds, according to a disclosure included in the pension’s June 14 meeting materials.

LACERS committed as much as $30 million to Vista Equity Partners Fund VI, its fifth allocation with the firm, led by Robert Smith and Brian ShethVista Equity Partners set an $8 billion target and $10 billion hard cap for Fund VI.

The $14 billion retirement system has allocated a total of $105 million across Vista Equity Fund III, Fund IV, Fund V and Vista Foundation Fund II since 2007. In aggregate, those commitments netted a 26.5 percent internal rate of return and 1.8x multiple as of Dec. 31, a Portfolio Advisors report for LACERS showed.

As with its previous funds, Vista will use Fund VI to acquire enterprise-software companies. Fund VI will likely include 12 to 15 portfolio companies with typical investments reaching as much as $1 billion, a staff memo said.

In addition to its commitment to Vista, LACERS allocated as much as 22 million euros ($22.8 million) to Astorg VI, a new fund targeting 1.5 billion euros with a 2 billion euro hard cap for investments in European mid-market companies.

Astorg Partners of Paris specializes in business-to-business companies offering niche products or services, according to a Portfolio Advisors memo. The firm’s first three funds are top-quartile performers by Cambridge Associates’ measurements, Portfolio Advisors reported.

LACERS held 10 percent of its investment exposure in PE assets as of Dec. 31, meeting materials said. Its $1.3 billion portfolio of core assets has netted an 11.6 percent IRR since inception. A separate $99 million portfolio composed of emerging managers netted a 2.5 percent IRR as of the same date.

Action Item: Portfolio Advisors’ most recent report on LACERS’ PE portfolio: http://bit.ly/1VX4m9o