LA Fire & Police eyes $450m in PE commitments for 2017

The $20bn pension fund increased its annual expected commitment range to $425m-$475m for 2017 after raising its target allocation to 12% for private equity in June.

The Los Angeles Fire & Police Pensions expects to commit about $450 million to private equity in 2017 to meet its new 12 percent target allocation to the asset class.

LAFPP’s new range for private equity commitments is between $425 million and $475 million per year, up from a range of $300 million to $350 million in 2016, according to materials for its March board meeting. Each fund commitment will be between $7.5 million and $40 million, the materials said.

The $20 billion pension fund is upping its commitment pacing to meet the new 12 percent target allocation to private equity, which was approved in June 2016. Previously, its target allocation was 9 percent until 2013, and 10 percent between 2013 and 2016. As of 28 February, LAFPP’s actual allocation to private equity stood at 8.8 percent.

Reflecting those targets, LAFPP committed $280 million in 2013 and $360 million in 2014. Last year, the pension committed $433.8 million to private equity across 24 funds, far above the expected range, the materials showed.

So far in 2017, LAFPP has committed $112.5 million to five funds.

According to the materials, the pension plans to increase its exposure to Asia within its international bucket. The region has a target allocation within private equity of 15 percent to 35 percent, while the rest is allocated to the US. The target allocation to Asian funds wasn’t disclosed.

Broken down by strategy, LAFPP’s long-term target is to allocate 50 percent to buyout, 30 percent special situations and 20 percent growth equity, the materials said.

Commitments made so far in 2017 by LAFPP to private equity comprise:

$40 million to large-cap tech-focused fund Silver Lake Partners V

$40 million to energy-focused EnCap Energy Capital XI

$15 million to tech-focused Stripes Group’s SG Growth Partners IV

$10 million to healthcare venture firm Oak HC/FT’s Oak HC/FT II

$7.5 million to lower mid-market P4G Capital Partners, establishing a new relationship with the manager