LACERA seeks secondaries advisor in line with strategic change

The $48bn pension fund has proposed giving its CIO the freedom to sell up to $500m in fund stakes per year without needing board approval.

The Los Angeles County Employees’ Retirement Association is seeking a secondaries advisor, in line with changes that allow the pension to buy and sell fund stakes.

Chairman of the public/private equity committee Herman Santos recommended the board approve the “minimum qualifications and evaluation criteria” for a secondaries advisor, according to the agenda for its 10 January meeting. This would trigger the sending out of a request for proposal.

The precise nature of these criteria is unclear.

In January 2017 LACERA made exploring the sale of legacy assets on the secondaries market one of its priorities for the year.

In September Santos recommended that the board allow the chief investment officer to approve secondaries sales of up to $500 million per year without requiring the investment board’s approval.

At the same meeting, investment officers recommended the board also grant the CIO authority to purchase fund interests on the secondaries market, including those that are not part of LACERA’s portfolio. Purchases would be constrained to $50 million-worth in year one, $100 million in year two, $250 million per year in in years three to five, and $500 million per year thereafter, the minutes show.

LACERA has at least $4.5 billion in private equity assets under management, according to PEI data.