Los Angeles City Employees' Retirement System has committed up to $40 million to Apollo Investment Fund VIII, a buyout fund managed by Apollo Global Management, according to a notification for the $13 billion pension fund's Nov. 26 board meeting.
The commitment was recommended by LACERS' private equity consultant, Hamilton Lane, under a discretionary mandate.
LACERS has committed a total of $40 million to three other Apollo funds. Staffers concurred with Hamilton Lane, and the commitment was made without board action.
Apollo's eighth buyout fund has a $12 billion target. LACERS is being charged a 1.5% management fee up to $7 billion in total commitments and a 1% fee for commitments beyond $7 billion and a 0.75% fee after the fund's investment period. Carried interest, which is LACERS' slice of the profits, is 20%, with an 8% preferred return, which is the minimum internal rate of return Apollo must earn before it can collect its share of the profits.
The board will discuss at its Nov. 26 meeting whether to hire Townsend Group as its real estate consultant as recommended by the staff, replacing Courtland Partners. LACERS issued an RFP on Jan. 22.
Separately, the pension fund's contract with BlackRock Institutional Trust for passive management of a Russell 1000 Value index portfolio expired Nov. 21, and the assets are being moved to an S&P 500 index portfolio to reduce the overweight in value equities, Brian Fujita, investment officer, reported to the board, according to the minutes of LACERS' Nov. 12 board meeting. The manager of the S&P 500 index portfolio couldn't be learned by press time.
