Los Angeles Fire & Police eyes up to $950 million in private equity commitments

Los Angeles Fire & Police Pensions plans to commit $700 million to $950 million to private equity in 2021, the $27.8 billion pension plan’s private equity strategic plan update shows. LAFPP committed $734.2 million to private equity in 2020. The plan had about $3 billion in private equity as of Sept. 30, representing 12.1% of the total plan. Los Angeles Fire & Police Pensions’ target private equity allocation is 14%.

In the first nine months of 2020, the pension plan’s private equity allocation had a net negative cash flow of $105 million for the first time since 2011, when it had a net negative cash flow of $62 million. Net negative cash flows means that the pension plan made more contributions than it received back from its general partners in distributions.

Portfolio Advisors, the pension plan’s private equity consultant, said in the strategic plan update that LAFPP should “lean into” the private equity asset class in 2021 and 2022. “Vintage years 2019 through potentially 2022 could be some of the better performing vintage years in the history of private equity,” Portfolio Advisors said in the update.

Read more/Source: Pensions&Investments