LACERS’ appetite for emerging managers in three charts

Emerging managers accounted for 3.9% of the investor's $1.7bn private equity portfolio as of 31 December, compared with 5.1% of its private real estate programme.

Los Angeles City Employees’ Retirement System is a keen supporter of nascent private equity firms and last year moved to expand the pool of emerging managers to which it can consider committing.

Seven of the 49 private equity fund commitments authorised by LACERS in the 36 months to 31 December were to emerging managers, according to an annual report published last week.

The $16.7 billion US public pension made two commitments in 2017, $10 million each for Defy I, a $151 million 2015-vintage, and NMS Fund III, a 2017-vintage that is targeting $350 million, according to PEI data.

Emerging managers accounted for 3.9 percent of the investor’s $1.7 billion private equity portfolio as of 31 December, compared with 5.1 percent of its private real estate programme. Private equity accounted for 10 percent of its total portfolio, below its 12 percent allocation.

LACERS moved to expand the pool of emerging private fund managers it can consider for commitments in March 2017. Staff proposed an increase in the maximum assets under management size of first-time fund managers from $500 million to $750 million, and set a new $1 billion cap on second-time fund managers for its private markets emerging manager programme, which includes private equity, real assets – excluding real estate – and credit, according to meeting materials at the time.