- Emerging manager program for firms with less than $500 mln
- Bain announced first two deals July 17
- Buyouts had reported Bain was in LA City’s EM program
Los Angeles City Employees’ Retirement System will slide its commitment to Bain Capital’s social-impact fund out of its emerging-manager program, a source with direct knowledge of the retirement system told Buyouts.
LACERS is still an LP in the fund. The retirement system will now group the Bain commitment alongside its investments in other, more established private equity firms, the source said.
LACERS originally allocated $10 million to Bain Double Impact Fund through its emerging-manager program, Buyouts previously reported.
The system’s investment guidelines prohibit using the program to allocate capital to established PE firms, which include those with more than $500 million of assets. By that measure, the $75 billion Bain Capital manages through a variety of platforms should disqualify the firm from receiving commitments through LA City’s emerging-manager platform.
The fund qualified in other respects. Former Democratic Gov. Deval Patrick, one of the fund’s top partners, is a first-time PE investor. The fund’s investments in companies that provide tangible environmental, educational or social benefits also fulfill some of the secondary benefits public pensions seek from investing in new and emerging managers.
Bain announced its first two deals through the fund on July 17, when it acquired stakes in composting business Living Earth and Planet Fitness franchisee Impact Fitness, which operates gyms in Indiana and Michigan. Bain Double Impact Fund closed on $390 million, $350 million of which came from outside investors, a firm spokesperson said.
LACERS valued its private equity portfolio at roughly $1.5 billion. Roughly 10 percent of the retirement system’s private equity commitments are directed at emerging managers each year.
Action Item: For more information about LACERS and its PE program, visit www.lacers.org
The skyline of downtown Los Angeles through a layer of smog is seen in the distance from a rooftop in Hollywood. Photo courtesy Reuters/Fred Prouser