Ventura County earns LPAC seat for distressed debt fund

LPAC seats offer systems many advantages – if they can obtain one.

Ventura County Employees’ Retirement Association gained an LPAC seat for VWH Capital Management’s third fund, which is focused on distressed mortgages and loans.

LPs, particularly those with smaller AUMs, covet LPAC seats on funds. LPAC seatholders are called upon to advise on potential conflict situations in funds, including cross-fund investments and continuation vehicle deals. At many funds, the LPAC is expected to disseminate information from the GP to the full LP base.

Ventura County CIO Dan Gallagher said the VWH Partners III LPAC seat was particularly helpful as the $7.8 billion system looks to build out its private credit program. The board authorized Ventura County to accept the LPAC seat at its November meeting. It committed $50 million to Fund III in September.

Buyouts watched a web stream of this meeting.

In April, Ventura County’s board voted to increase its target allocation to private credit from 6 percent to 8 percent.

VWH is seeking $1.5 billion for its third fund. The fund will look to acquire residential and commercial mortgage and asset-backed securities and loans.

Ventura County has LPAC seats on Pantheon Global Secondary Fund V, Abbott Secondary Opportunities Fund and Drive Capital Fund III, according to board documents. Ventura County also has a board seat on a HarbourVest fund, Gallagher said at the November meeting.

“Advisory board seats are highly coveted in the industry by limited partners for their unique information advantage. These seats are generally offered to only a select, small subset of investors, and are most commonly offered to the largest investors in the fund. Given the expected ‘bite-size’ of VCERA’s future investments, I don’t expect many advisory boards seat invitations going forward,” Gallagher wrote in a memo to the board.