LACERS picks four private credit managers; commits $200 mln to two

  • Assets Under Management: $17.3 bln
  • Contact: +1 213-779-8328
  • Why is it important: The system is taking a wait and see approach for the other two managers before it commits to any of their funds.

Los Angeles City Employees’ Retirement System chose four private credit investment managers as part of its private credit mandate, according to a report from the system’s general manager Neil Guglielmo at the July meeting.

The system interviewed Benefit Street Partners and Monroe Capital for its U.S. portion of the search; and Alcentra Limited and Crescent Capital Group for the non-U.S. portion.

LACERS made a commitment of $100 million each to Benefit Street and Alcentra, which invests in the core middle market space, according to meeting noted.

“The committee preferred Alcentra and Benefit Street for initial funding due to their investments into larger companies with a more diversified portfolio approach,” Guglielmo wrote. “This option maximizes LACERS flexibility to deploy assets to the lower middle market private credit space without going through the entire RFP process at a future point.”

Funding for Crescent and Monroe, which invests in the lower middle market, will be decided at another time, according to the report.

“They were a little disappointed that they didn’t get the bid right away, but the idea here is to get them on board with an investment management agreement,” investment officer Jimmy Wang said at the meeting. ‘They’re on board and ready to go.”

The system is building out a 7 percent allocation to the asset class, Buyouts reported last year.

In addition to private credit, LACERS is looking for managers in the small-cap equity, small-cap emerging, fixed income, high yield and emerging market debt local currency asset classes, according to Buyouts.