Los Angeles City Employees' Retirement System invested or committed $1.1 billion to equities, fixed income and alternatives, according to information on the $19.1 billion pension fund's website.
LACERS hired four managers to run, along with incumbent EAM Investors, a total of about $550 million in various active U.S. small-cap equities portfolios, according to information on the $19.1 billion pension fund's website.
The hires were the result of an RFP launched Feb. 25, 2019. LACERS is investing $175 million with Copeland Capital Management for a domestic small-cap core equity mandate, $140 million to emerging manager Bernzott Capital Advisors for domestic small-cap value equities, $80 million to Granahan Investment Management for domestic small-cap growth equities, $70 million to Segall Bryant & Hamill, domestic small-cap value equities. EAM Investors' $142 million portfolio is being reduced to $85 million in a U.S. small-cap growth equity portfolio. Funding is coming from passively managed small-cap core, growth and value equity portfolios.
Separately, LACERS also hired two managers to run about $235 million each: Loomis, Sayles & Co. for a high-yield fixed-income mandate and DDJ Capital Management for a hybrid high-yield fixed-income/bank loan portfolio, according to information on the $19.1 billion pension fund's website.
The investment committee also extended the contract of incumbent Aegon USA Investment Management Co., which manages $392 million in an active U.S. high-yield fixed-income portfolio. The selections of Loomis Sayles and DDJ Capital followed an RFP launched Feb. 19, 2019. Aegon had rebid. Funding for the two mandates is primarily from Aegon's mandate as well as a reduction in LACERS' core fixed-income allocation. NEPC, LACERS' general investment consultant, assisted.
LACERS also committed a total of up to $80 million to three alternative investment funds. Pension fund officials committed up to $40 million to KPS Special Situations Fund V, a special situations fund, and up to $10 million to KPS Special Situations Mid-Cap Fund, a lower-middle-market fund, both managed by KPS Capital Partners. Both funds aim to make control investments in underperforming manufacturing and industrial companies in North America and Europe. LACERS has invested with KPS Capital in the past.
LACERS also committed up to $30 million to Clearlake Capital Partners VI, a North American mid- to large-cap buyout fund managed by Clearlake Capital Group. Clearlake is a new manager relationship for LACERS. Alternative investment consultant TorreyCove Capital Partners assisted with all three commitments.
