Fresno County tables decision on private equity pause

The $5.6bn system’s investment staff criticized projected distributions from consultants.

Fresno County Employees’ Retirement Association investment staff withdrew a recommendation to pause new commitments to private equity in the second half of the year.

Many LPs have focused on upcoming distributions lately as the slowed exit market is causing liquidity concerns. Fresno County investment staff and its consultants widely differed on projected distributions, which prompted a recommendation to halt new commitments in the second half of 2023.

Fresno County board members pulled the staff’s recommendation at the system’s board meeting held April 5. Buyouts listened to a broadcast of the meeting.

Buyouts previously reported on the recommendation on March 31.

Board president Rauden Coburn said staff would “refine” its proposal due to undisclosed issues he and other board members had with a report supporting the recommendation.

Board members also alleged the report included mistakes but did not elaborate further.

According to the report, Hamilton Lane and Aksia projected a combined total of $580 million in distributions for 2023 and 2024. Hamilton Lane is a discretionary manager for Fresno County. Aksia is the system’s private credit adviser.

Verus, the general investment adviser for Fresno County, agreed with these assessments in a pacing analysis presented at the system’s March board meeting.

Fresno County investment officer Anirudh Chowdhry said the system’s internal analysis projected $300 million in distributions – a difference of $280 million.

“I am recommending a pause in new commitments for the remainder of the year because distributions are uncertain, which could cause a substantial negative cashflow making FCERA a forced seller of liquid assets at an inopportune time,” Chowdhry said.

The board did not reschedule a discussion on the possible pause on new private equity commitments.