Los Angeles Pension Ramps Up Private-Equity Investing

The Los Angeles City Employees’ Retirement System is increasing the amount of capital its staff can commit to private equity without preapproval as part of a bid to form fewer but larger relationships with fund managers and get better legal and economic terms for investments.

Lacers’ board on March 22 approved raising the pension system’s limit on the amount its investment staff can commit to private-equity funds to $150m without prior approval.

Before the $22.8bn pension fund’s board made the change, its private equity consultant, Aksia TorreyCove had the discretion to commit up to $50m for new partnerships, and up to $100m for existing general partners without board preapproval. Staff proposed the change based on its research of peer U.S. public pension plans and discussions with Aksia executives.

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Separately, the board approved submitting a comment letter to the Securities and Exchange Commission supporting its Feb. 9 proposed rule change aimed at enhancing the regulation of alternative investment managers, improving transparency and reducing potential conflicts of interest.

“Given the increasingly important role that private market investments play in the asset allocations and funding targets of institutional investors like LACERS … the proposed rules are essential to protect the right of investors to access information critical to make informed investment decisions,” LACERS said in its comment letter.

Source: Pensions & Investments

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