LACERA takes lead role in another GP-led transaction

Los Angeles County Employees’ Retirement Association has taken the lead on a GP-led transaction for the second time this year.

Nordic mid-market buyout house Adelis Equity Partners has rolled in-vitro diagnostics company SSI Diagnostica Group out of Adelis Equity Partners Fund I and into a continuation fund, a statement said.

Denmark-headquartered SSID has acquired US gastrointestinal diagnostics company TechLab as part of the transaction. Adelis originally bought SSID in 2016.

StepStone Group was the lead investor on the transaction with LACERA joining as junior lead. The deal is also backed by several other institutional investors as well as SSID’s management and board, 2021-vintage Adelis Equity Partners Fund III and Adelis team members.

Lazard advised on the deal, which was at least €300 million in size, according to a source with knowledge of the deal.

Earlier this year, LACERA acted as co-lead investor on a $1.8 billion process that saw seven companies managed by Accel-KKR moved into a continuation fund, Secondaries Investor reported.

The deal was among the first in which a US public pension took a lead role, a nod to the growing sophistication and desire on the part of some big plans to take a more direct role in investment management.

Leading on secondaries deals is one of LACERA’s strategic goals for 2022, according to documents from the pension system. In 2020, it increased the amount of capital it could invest in secondaries deals to $450 million. The board also agreed to allow LACERA to co-invest alongside managers approved by its investment consultant StepStone, affiliate title Buyouts reported.

“We intend to continue to seek opportunities to take on lead investor roles in future GP-led secondary transactions where we have a high degree of conviction,” LACERA chief investment officer Jonathan Grabel told Buyouts in April.

LACERA stepping up will also inject much-needed capital into a market that many consider to be undercapitalised, given the supply. The level of dry powder for secondaries sat at $94 billion at the end of the first half, compared with $105 billion at the end of 2021, according to adviser Evercore.