As a replacement for its previous private equity consultant, the $12.7 billion retirement system has appointed Portfolio Advisors to fill the position on a three-year contract. Portfolio Advisors will provide LAFPP with investment advice covering the entirety of its private equity portfolio.
LAFPP had been in search of a private equity consultant since May of 2009, following the termination of its contract with Aldus Equity after Aldus’s alleged involvement in a “pay-to-play” scheme. Since the termination of Aldus Equity’s contract, LAFPP’s specialist private equity consultant, StepStone Group, stepped in to cover some of Aldus Equity’s previous duties.
LAFPP has selected Portfolio Advisors not only to fill the gap left by Aldus Equity but also take over the specialized private equity investment mandate handled by StepStone Group. Portfolio Advisors demonstrated their experience and ability to review both core and specialty private equity managers to LAFPP staff. Coupled with the fact that Portfolio Advisors’ fee proposal was the second lowest of the five finalists, LAFPP has opted to consolidate both its core and specialty private equity programs, leading to lower fees overall and Portfolio Advisors overseeing LAFPP’s entire portfolio.
Portfolio Advisors provides both discretionary and non-discretionary services to its clients, dependent on their requirements. Clients include public, corporate, church and insurance plans, endowments, foundations, and family offices. The majority of its consultancy clients are based in the US, but it does have some overseas clients, which includes a number of European clients.
Following approval in September 2009, LAFPP adopted a manager policy in November of the same year which sets a ‘discretion-in-a-box’ cap for its private equity consultant. The new policy binds its private equity manager to a $25 million cap as well as allocation limits. Los Angeles Fire and Police Pension System (LAFPP) has been an investor in private equity for over two decades. It has a target allocation of 10% to private equity, it considers most fund types, in particular buyout and venture capital, but does not invest in fund of fund vehicles.
LAFPP also recently appointed R.V. Kuhns & Associates as its general investment consultant.
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