The Los Angeles Fire & Police Pensions traveled a bumpy road to the top spot of Pensions & Investments and HEC's rankings of U.S. pension fund buyout programs with the lowest risk and highest return.
In spring of 2009, two Los Angeles Fire & Police Pensions' board members received letters from the Securities and Exchange Commission requesting information and documents concerning possible ties to third-party marketers and placement agents working for investment managers that ran assets for the pension system.
One of the two board members receiving the letters was the chairman, Sean Harrigan. While Mr. Harrigan was board chairman at Los Angeles Fire and Police, he pushed to have the pension fund's two private equity consultants replaced, Chief Investment Officer Tom Lopez said. One of the consultants that was hired under Mr. Harrigan's watch was Aldus Equity Partners. Aldus Partners was terminated on May 7, 2009, under the cloud of a national pay-to-play scandal; Mr. Harrigan resigned from the board that same day.
Since then, there has been more consistency in how the program has been run, Mr. Lopez said.
The plan moved to a single private equity consultant in 2009, hiring Portfolio Advisors LLC, with investment discretion. Under the previous arrangement, the pension system had two consultants, one of which had investment discretion and one did not.