LA Fire and Police makes $10m cleantech bet

The pension is backing Angeleno Investors III, which is raising $250m for investments in alternative energy and clean technology.

The $12.5 billion Los Angeles Fire and Police Pensions system has committed $10 million to Angeleno Investors III, a fund targeting $250 million for investments in alternative energy and clean technology companies in the US.

The fund will focus on “expansion stage” deals across various subsectors in the cleantech space. The Angeleno Group was founded in 2001 as a Los Angeles-based venture capital firm by Yaniv Tepper, Daniel Weiss and Zeb Rice.

The general partners will contribute at least 2 percent to the fund, according to documents from LA Fire and Police. The management fees for the fund are 2.5 percent per year of capital commitments during the investment period, and 2.5 percent of the funded and unreturned commitments of the LPs after the investment period.

Carried interest on the fund is 20 percent, with an 8 percent hurdle rate, the documents said.

Some of the firm’s investments include Altra, which acquires and develops portfolios of renewable energy projects throughout the US, specifically focused on the production and sale of ethanol and biodiesel; Clean Air Power, which developed a technology allowing large conventional diesel engines to run on natural gas; and Konarka, which develops, manufactures and markets lightweight, flexible plastic-based photovoltaic materials.

LA Fire and Police has committed $1.26 billion to private equity, or 10 percent of its investment portfolio. Total approved commitments for 2009 stand at $189 million. The pension’s private equity programmes’s fair market value is $651 million, with about $768 million in unfunded commitments, according to pension documents.

The pension has been searching for a private equity consultant since firing Aldus Equity in May after the firm and its founder, Saul Meyer, were charged with participating in a pay-to-play scheme involving the New York State Common Retirement Fund. The pension, which had been using Aldus and the StepStone Group as its private equity consultants, decided in June to move to a single consultant model.

Candidates for the job include Ennis Knupp, New England Pension Consultants, Cliffwater, Macquarie Funds Management, Portfolio Advisors, StepStone, Credit Suisse, Hamilton Lane and Wilshire Associates.