Los Angeles City Employees' Retirement System committed a total of up to $105 million to seven funds, Aug. 11 board meeting materials show.
The $14.6 billion pension plan committed up to $25 million to TA XII-A, a projected $4 billion buyout fund that is adjunct to the $4 billion TA XII, managed by private equity firm TA Associates. The new fund will invest in late-stage, venture, expansion, growth equity and middle-market buyouts. LACERS committed to two prior TA Associates funds.
The pension fund also committed up to $10 million each to two first-time funds by emerging private equity managers: 1315 Capital, which has a $175 million target for a growth equity strategy managed by 1315 Capital Management and New Water Capital, a $406 million special situations strategy.
Separately, the pension fund committed up to $15 million each to core real estate funds Clarion Lion Industrial Trust, Jamestown Premier Property Fund, Morgan Stanley Prime Property Fund and Principal U.S. Property Account. All four are open-end funds and are additional commitments. LACERS committed $35 million to each of these funds previously.
Some 39.2% of the pension fund's $311 million real estate portfolio was committed to core real estate as of March 31, a report by LACERS real estate consultant Townsend Group states. Its target for core real estate is 60% of the real estate portfolio.
Also, an audit of the pension fund's real estate and private equity portfolios presented to the board at its Aug. 11 meeting found that LACERS is paying average management fees of $52 million a year, excluding incentive fees and other expenses associated with private investments. Among the audit's recommendations are that pension fund officials develop a process for identifying and reporting all private equity investment costs, including performance or incentive fees and other expenses such as organization costs that are usually deducted from the investments' net asset value.
