Los Angeles County Employees Retirement Association, Pasadena, Calif., plans to launch an RFP for a private equity consultant sometime before Jan. 21, said Jonathan Grabel, CIO of the $60 billion pension fund.
Incumbent Stepstone Group's contract is set to expire in October. Stepstone will be invited to rebid. A selection is expected as early as September. LACERA has $7.1 billion invested in private equity and a private equity target of 10% with an allocation range of 7% to 13%.
Separately, the board on Dec. 9 approved a growth structure review, the primary planning document for its growth asset class. LACERA has $29.4 billion in the asset class, which includes global equity, private equity and real estate.
Under the growth category plan, LACERA plans to commit $1.6 billion to private equity in 2021, plus or minus 20%. The private equity pacing plan for subsequent years will be set after LACERA completes its asset allocation review in 2021.
Also as part of the plan, LACERA changed several private equity co-investment and secondary program investment parameters. These changes include raising the maximum co-investment size to $70 million from $40 million; increasing co-investment and secondaries commitment pace to $450 million per year from $350 million per year; expanding co-investment deal types to include companies not yet producing earnings; eliminating primary fund minimum capital invested requirements for secondary opportunities; and providing staff the ability to make non-U.S co-investments.
Also separately, the board in closed session committed $70 million to a continuation fund managed by Ampersand Capital Partners containing three of their portfolio companies. LACERA was not an investor in the original fund, Mr. Grabel said. According to a November news release, Ampersand closed the $670 million continuation fund formed to acquire three portfolio companies held by multiple mature Ampersand funds. Existing investors were given the option of reinvesting their proceeds or receiving full or partial liquidity. The fund also admitted new limited partners such as LACERA.
The board also approved establishing a bench of three transition management service providers: BlackRock Institutional Trust Co., Citigroup Global Markets, and State Street Bank and Trust. The selections were made following an RFP issued in July. LACERA had initiated the search to create a roster of transition managers that are vetted and board-approved to expedite the time required to identify a transition manager.
In other news, LACERA's board replaced Greenhill & Co. with Jefferies Group on the list of firms authorized to provide LACERA with private equity secondary sale and purchase consulting services. LACERA made the change because LACERA's primary contacts at Greenhill publicly announced they are moving the secondaries team to Jefferies, effective Jan. 19.
"LACERA has enjoyed a highly collaborative relationship with the team at Greenhill thus far and has developed an efficient process with the team providing such services," a memo to the board stated.
