Los Angeles County Employees Retirement Association, Pasadena, in closed session committed $1 billion to Credit Suisse Asset Management in a separate account for syndicated bank loans, according to documents recently posted on the $60.7 billion pension fund's website.
"We anticipate that the entire amount will be invested before the end of this year," said Vache Mahseredjian, principal investment officer, fixed income, in an email.
Separately, the board in closed session also committed up to $110 million total to two private equity funds. LACERA committed up to $60 million to Revelstoke Single Asset Fund I, a buyout fund that invests in health-care services companies managed by Revelstoke Capital Partners. The fund closed in December with $660 million of total commitments, according to a news release. Concurrently, with the closing of that fund and a sister fund, the $714 million Revelstoke Capital Partners Fund II, the funds jointly acquired Upstream Rehabilitation, the third-largest provider of outpatient physical therapy services in the U.S., the news release said.
LACERA also committed up to $50 million to Montefiore Investment V, a French small buyout fund targeting service businesses in the travel and leisure, retail, business-to-consumer, and business-to-business sectors.
The board also hired MSCI's analytics business to provide total fund risk services, MSCI ESG Research and Sustainalytics U.S. for ESG data and analytics, and S&P Trucost for climate-related data. The firms were hired following a search in January 2019 to identify multiasset class investment risk systems as a means of identifying, assessing, monitoring and reporting portfolio risk, including accessing environmental, social and governance data and analytics. LACERA's general investment consultant, Meketa Investment Group, assisted.
LACERA also reported in the documents that in a closed session at its Oct. 8 meeting the board voted to accelerate the termination of real estate manager Vanbarton Group, which had originally been approved, under certain conditions, in 2018. On Dec. 31, Vanbarton was terminated and management responsibility for its three remaining assets was transferred to Clarion Partners, an existing manager for LACERA, effective Jan. 1.
Separately, the board in closed session at its September meeting voted to terminate two hedge fund portfolios: $490 million in Goldman Sachs Hedge Fund Strategies, a diversified hedge fund-of-funds portfolio, and $480 million in Grosvenor Capital Management's diversified hedge fund-of-funds portfolio. The money is being invested with existing hedge fund managers Capula Investment Management, Davidson Kempner Institutional Partners and HBK Capital Management. Those managers' maximum allocations were increased at the same meeting. The capital managed by Goldman Sachs Asset Management and Grosvenor is expected to be returned by end the of 2020. These actions were taken as part of a hedge fund structure review in which the board took other actions that included building a direct hedge fund portfolio and an emerging manager program, as well as identifying a dedicated managed account provider.
In other action, the board changed its assumed rate of return to 7% from 7.25%. LACERA staff and its actuary Milliman had recommended the board adopt a 6.75% investment return assumption because it reflects the current economic environment, according to a Milliman presentation. Milliman's presentation also indicated that 6.5% or 7% "would also be reasonable."