Los Angeles City Employees’ Retirement System committed a total of $35 million to alternative investment managers, said notifications to the board for its Tuesday meeting from its private equity consultant Portfolio Advisors
Portfolio Advisors has a discretionary mandate within agreed upon limits.
The $13.9 billion LACERS committed up to $17.5 million to Oaktree Capital Management’s Oaktree Opportunities Fund Xb and up to $7.5 million in Oaktree Opportunities Fund X. Oaktree Opportunities Fund X is a distressed debt fund with a target size of $7 billion. Fund Xb is a “standby pool of capital” with a target of $3 billion that may be accessed by Oaktree should investment opportunities increase markedly, or as co-investment capital or as the next distressed debt fund should there be no expanded investment opportunities by the time Fund X is 80% invested, the Portfolio Advisors’ memo to the board said. LACERS has invested with Oaktree since 1996. Its last Oaktree investment was a $9 million commitment to Oaktree Opportunities Fund VIIb in 2008.
LACERS also committed up to $10 million to private equity fund Thoma Bravo Special Opportunities Fund II, a targeted $1 billion buyout co-investment fund. LACERS has invested with Thoma Bravo in the past, including a $15 million commitment to Thoma Bravo Fund XI.
LACERS also hired Northern Trust for custodial and securities lending services following an RFP launched on Sept. 29. Northern Trust has provided custodial and securities lending services for LACERS since 1991. The new contract is for three years ending June 30, 2018.
Separately, following an asset-liability study conducted by its general investment consultant Wilshire Associates, LACERS opted to retain its current asset allocation of 65% equities, 25% fixed income and 10% real assets. However, LACERS might study risk parity with a view of possibly adding a leveraged bond portfolio following its next asset-liability study.