San Diego won’t use secondaries to reduce PE fund managers

The San Diego County Employees’ Retirement Association (SDCERA) plans to reduce the number of private equity funds and fund managers in its portfolio without using the secondaries market, according to documents from its January board meeting.

SDCERA has used the secondaries market to reposition its portfolio in the past, but according to a spokesperson the pension has no plans to use it again.

Currently SDCERA’s portfolio has 53 private equity funds, managed by 31 general partners. Its plans call for between 25 and 35 funds managed by 16 to 18 GPs.

“SDCERA anticipates reducing the number of managers through attrition and continuing to invest in larger-sized commitments,” the spokesperson said.

The pension has wound down older investments of between $10 million and $15 million and has begun making larger commitments of $50 million-$100 million to new private equity funds.

It’s unclear why SDCERA won’t use the secondaries market but the pension proceeded to discuss the “purchase or sale of pension fund investments” at its January board meeting. The spokesperson declined to comment on the discussion for confidentiality reasons.