Lexington receives $90m US pension boost

The firm has received a commitment from Los Angeles Water & Power Employees Retirement Plan, which is working to push its PE exposure to 8%.

Lexington Partners has received a commitment from Los Angeles’ fourth-largest pension fund.

The retirement board of Los Angeles Water & Power Employees Retirement Plan unanimously approved an investment of up to $90 million in Lexington Capital Partners IX, according to the agenda for its 16 January meeting.

The fund will draw $75 million from its retirement fund and $15 million from its retiree health benefits fund.

LADWP previously committed $30 million to the 2006-vintage Lexington VI and $35 million to the 2009-vintage Lexington VII, the document noted.

The pension has $13 billion in total assets under management, 3 percent of which is allocated to private equity. Its target allocation is 8 percent, according to Secondaries Investor data.

The pension has previously invested with several Landmark Partners private equity secondaries funds and two 2016-vintage funds managed by venture capital secondaries firm Industry Ventures.

Lexington started raising its ninth flagship secondaries fund in February with a target of $12 billion, Secondaries Investor reported.

Predecessor Fund VIII raised $10.1 billion by final close in 2015, after around a year-and-a-half in market.

It achieved a net internal rate of return of 31.8 percent as of the end of March 2018, according to data from the Florida State Board of Administration.

Lexington backed a variety of deals in the second half of 2018, including a $1 billion stapled tender offer on two of TPG’s Asia funds and a €600 million transaction involving a portfolio of direct stakes owned by Eurazeo.