LA Water & Power ups PE commitments for 2017

The increase is part of the $11bn pension’s effort to meet its new long-term private equity target allocation of 8%.

The Los Angeles Water and Power Employees Retirement Plan (WPERP) plans to commit $260 million to private equity funds in 2017 in an effort to meet its target allocation to the asset class.

This represents a slight increase from the $245 million in commitments that were made as of the third quarter of 2016, and $227 million in 2015, according to its third quarter 2016 private equity performance report prepared by its advisor Pension Consulting Alliance for WPERP’s 8 March meeting.

The city pension has been steadily increasing its commitment pacing plans since it adopted a long-term target of 8 percent to private equity, up from 5 percent, in September 2015.

As of 31 January, the $10.6 billion pension was underweight in private equity, at a 3.19 percent actual allocation, according to materials for its 8 March meeting.

The pension had 23 commitments to 15 private equity firms as of that date, and the largest exposure was to Vista Equity Partners through its Vista Equity Partners Funds IV, V and VI, totalling $141 million in commitments.

The next four largest fund managers by exposure were Ares Management, at $70.5 million; Landmark Partners, at $64.1 million; EnCap Investment, at $64.1 million; and Blackstone, at $51.3 million. These exposures include both funded and unfunded values.

The figure for Ares did not include a $60 million commitment that WPERP made to Ares Corporate Opportunities Fund V in October 2015, which was finalised but had not been funded as of 31 January, according to the report.

Considering this and other potential commitments to some of the largest managers, PCA noted that Vista’s position as the highest exposure for WPERP is expected to change.

WPERP’s commitments made in the first three quarters of 2016 were:

• $60 million to software buyout fund Vista Equity Partners VI

• $60 million to venture secondaries funds Industry Ventures Secondary VIII and Industry Ventures Special Opportunities Fund III-A

• $125 million to fund of funds Adams Street Global SMB WPERP Fund, which will span over a three-year period

 

WPERP was not available to comment.