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LACERS narrows private equity consultant search

The retirement system will continue working with its existing advisor Hamilton Lane or hire Portfolio Advisors as its new private equity consultant.

The Los Angeles City Employees’ Retirement System has narrowed its search for a private equity consultant to two finalists—Hamilton Lane and Portfolio Advisors, according to a source familiar with the system.  

The consultant search began on 4 February and closed on 6 March. The system received five responses and has selected these two candidates to proceed by appearing before the board for an interview, documents from the retirement system disclosed. The board will consider each consultant’s knowledge of general partners, ability to custom tailor services and reasonableness of fees. It is unclear when the consultant search will finish, the source told Private Equity International. 

LACERS did not return requests for comment. 

LACERS’ current consultant is San Francisco-based Hamilton Lane, which has $161.8 billion in assets under management as of 30 June. Hamilton Lane’s proposed fees for three years of advisory work are roughly $2.8 million. Hamilton Lane’s primary consultant for LACERS, Paul Yett has 18 years of private equity experience and six accounts, according to pension documents. The firm has 70 professionals working with the asset class. 

Portfolio Advisors is a fund of funds with $33.8 billion of assets under management and has spent 18 years providing private equity consulting services.  Portfolio Advisors’ proposed total fees for three years are about $2.3 million. Former Morris Anderson Investment Advisors executive Brian Murphy is Portfolio Advisors’ primary consultant and has 24 years of private equity experience, the documents disclosed. Portfolio Advisors is based in Darien, Connecticut and has 46 team members.

LACERS has about $12 billion in assets under management and had recently considered a new strategy for its private equity portfolio. Hamilton Lane had recommended LACERS consider secondary sales of some non-core investments and more commitments to distressed debt funds and fewer investments in mega-funds, PEI previously reported. 

LACERS recently approved a $30 million commitment to American Securities Opportunities Fund III, which is targeting $750 million on a $1 billion hard-cap, Private Debt Investor reported earlier this week. The fund has a 1.5 percent management fee on aggregate commitments during the investment period and a 1.5 percent fee on invested capital post-investment period. 

Sam Sutton contributed to this story.