Los Angeles County Employees Retirement Association, Pasadena, Calif., committed up to $150 million to buyout fund Hellman & Friedman Capital Partners VIII, said David Kushner, chief investment officer of the $47.6 billion pension fund, in an e-mail.
The staff withdrew a recommendation to commit up to $150 million to Baring Asia Private Equity Fund VI. Mr. Kushner could not be reached by press time for further information on the reason why the staff withdrew its recommendation.
The Hellman & Friedman fund will make investments ranging between $300 million to $1 billion for buyouts in North America and Europe.
LACERA has invested with Hellman & Friedman in the past. It committed $42 million to its fifth buyout fund in 2004 and $60 million to Fund VI in 2006. It did not invest in the firm’s seventh fund due to LACERA’s 2009 moratorium on private equity investments.
Grosvenor Customized Fund Investment Group conducted due diligence on the general partner. Hellman & Friedman owns 30% of Grosvenor Customized Fund Investment Group, noted a memo to the board of investments for its Wednesdaymeeting. Mitigating the potential conflict of interest, in part, is that Grosvenor will not receive an economic benefit from the recommendation, Hellman & Friedman does not interfere with Grosvenor Customized Fund Investment Group’s day-to-day operations and LACERA’s relationship with Hellman & Friedman predated its hiring of Grosvenor Customized Fund Investment Group as an adviser.
As of March 31, buyouts represented 75% of the pension fund’s private equity portfolio. The pension fund has an 11% private equity target allocation. In the future, LACERA expects to reduce the number of general partner relationships by not committing to new funds from existing managers that have underperformed, and increasing exposure to top-performing general partners such as Hellman & Friedman.