LACERS commits $20m to Insight Ventures

The California pension system formed a new relationship with Insight Ventures, committing to its eighth fund, which has a 4% GP commitment.

The Los Angeles City Employees’ Retirement System committed $20 million to Insight Ventures Fund VIII, a new relationship for the system, according to LACERS documents.

It’s not clear when exactly the commitment closed, but the board was updated on the activity at its meeting Tuesday.

Insight Ventures closed its Fund VIII on $2.57 billion on 29 May. The majority of the fund’s commitments came from existing investors.

Insight Ventures Fund VIII’s investment term will last five years out of a 10 year life. The fund’s term is subject to two one-year extensions. Insight Ventures will commit 4 percent of targeted commitments or up to $100 million, according to LACERS’ board report.

Insight will invest in companies with equity investments between $10 million and $100 million each, over a five year period, according to LACERS documents. LACERS’ private equity investment consultant, Hamilton Lane’s, investment report said 85 percent of the investments will be in the United States and 15 percent will be global.
Insight Ventures was founded in 1995 by managing director, Jeffrey Horing and Jerry Murdock. Prior to starting Insight Ventures, Horing was a member of the technology investment team at Warburg Pincus. Murdock founded Aspen Technology Group from 1988 to 1995. Currently he is a special advisor at Insight Ventures, according to the firm’s website.

The firm has eight managing partners who are supported by 19 investment professionals and 10 consultants, according to LACERS documents. Insight Ventures has raised seven growth equity funds, which it has invested in North American and European technology companies, since its inception. Its fund VII, which closed in 2010, invested in more than 35 companies including infrastructure software New Relic and ecommerce company Fanatics, according to the firm’s website. LACERS reported that Fund VII earned a net IRR of 19.8 percent and its predecessor earned 23.7 percent.

The California pension fund is reviewing a new strategic plan that could involve committing between $325 million to $350 million to private equity each year, Private Equity International reported in May. Hamilton Lane introduced the plan, which also proposed investing more in distressed debt and reducing investments with mega-funds. The private equity consultant suggested LACERS establish about eight to 12 private equity partnerships this year. Hamilton Lane also recommends LACERS increase its average investment size per deal by $30 million, PEI reported.