Alameda hikes private equity allocation

Alameda County’s Board of Retirement turned down a proposal to include private equity co-investment in the $5.6bn retirement system’s investment strategy, but it did boost its long-term allocation to a variety of alternative strategies.

The Alameda County Employees’ Retirement Association approved a 2013-2014 investment plan that increases its total allocation to private equity and other alternative strategies from 10 percent to 15 percent, according to documents made available by ACERA. 

The $5.6 billion retirement system’s 2013-2014 Private Equity and Alternatives Return Leading Strategy (PEARLS) increases its total private equity target from 5 percent to 7.5 percent. ACERA also boosted its ‘alternatives portfolio’ – which includes absolute return and other alternative strategies – from 5 percent to 7.5 percent.

The investment plan calls for four investments in buyout managers, totaling $155 million. ACERA also will commit $26 million across two to four venture capital funds and $17.5 million to a debt-related or special situations manager, according to documents. Projected commitments are contingent on due diligence and market opportunities, according to the PEARLS plan. 

Two elements of ACERA’s PEARLS plan were rejected by the board, according to its 12 December minutes. The board declined to give its investment staff the ability to make private equity co-investments with existing fund managers. A proposed change to increase the $25 million cap on staff’s authority to make PEARLS investments with existing managers also was voted down. Documents did not disclose why those proposals were excluded, and a spokesperson did not respond to calls by press time.