The size of Los Angeles County Employees’ Retirement Association‘s potential secondaries sale is $1.4 billion, according to documents posted on the pension’s website.
The $55 billion pension wants to sell a portfolio comprising at least 130 “non-core” fund positions in order to streamline the portfolio, reduce administrative burden and allow resources to be fully dedicated to key relationships, it said in a request for proposal issued in January.
LACERA wants to identify as many as five highly qualified secondaries advisors to lead the process, according to a memo seen by Secondaries Investor. This means a firm with a five-year track record as a secondaries intermediary; that has advised on a minimum of $2.5 billion of secondaries deals in the past five years; has advised on the sale or purchase of at least 200 distinct interests; and has worked with at least 25 institutional clients in the past two years, two of which had plan sizes of at least $5 billion, the memo noted.
LACERA will review submissions from advisors in February and a winner will be chosen on 15 June, according to the RFP.
In January 2017 LACERA made exploring the sale of legacy assets on the secondaries market one of its priorities. In September 2017, chairman of the public/private equity committee Herman Santos recommended 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.
The investment officers also recommended the chief investment officer was given the authority to purchase fund interests on the secondaries market, including those not already part of the 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 around $5 billion of private equity assets, according to PEI data.