Los Angeles County Employees' Retirement Association, Pasadena, Calif., committed up to $100 million to Patria Investimentos' Patria-Brazilian Private Equity Fund V, a Brazilian buyout fund.
The fund's target is $1.5 billion to be invested in sectors including consumer-driven, agribusiness and logistics, said a memo to the board. This is LACERA's first investment with Patria.
The board also committed an additional $250 million to a debt separate account managed by Cornerstone Real Estate Advisers, bringing the account to $750 million, said David Kushner, chief investment officer for the $47 billion pension fund.
The additional commitment was made after the board voted at its June 11 meeting to allow its debt managers to use capital commitment subscription financing, in which the security for the loans would be LACERA's uncalled commitment to the managers. The board followed staff's recommendation to increase Cornerstone's allocation to $750 million from $500 million and to instruct Cornerstone not to call more than $500 million, leaving the remainder to secure a loan. No additional allocation to the other debt manager, Quadrant, is needed because the firm already has uncalled capital of $270 million.
The board also approved an invitation-only process for its upcoming search for a manager to run a structured credit strategy. The timing of the search is yet to be determined. LACERA's suballocation to structured credit is 25% of its opportunistic fixed-income allocation, which is 25% of the entire portfolio. Staff and general investment consultant Wilshire Associates will prepare a list of eligible managers, with input from hedge fund-of-funds manager Grosvenor Capital Management and a screening of eVestment database.
Also, LACERA adopted a real estate investment plan that included committing an additional $300 million that staff may allocate to any risk sector and investment managed by existing separate account real estate equity managers. Any LACERA separate account manager not on its watch list will be allowed to propose an investment utilizing the $300 million. LACERA does not plan to make new commingled fund commitments unless “they are particularly compelling,” because the pension fund has a 10.2% actual allocation to real estate vs. its 10% target allocation.