The Los Angeles Fire and Police Pensions (LAFPP) is set this year to soar past its venture numbers from 2018, but it’s unclear if it will match the standout year it had in 2019.
The California LP made a $10 million commitment to Summit Partners Venture Fund V in June, as disclosed at the organization’s July board meeting. The fund will target investments of $10 million to $60 million in North America-based growth-stage companies in such sectors as technology and life sciences.
Fund V squeaked in a Q2 final close at the end of June with $1 billion of commitments. The fund was popular with US public pensions grabbing at least $193 million from seven different pensions. The vehicle received a $50 million investment from Texas County and District Retirement System and $45 million from the Maine Public Employees Retirement System, among others.
LAFPP has committed to multiple other funds by the manager, including Summit Partners Venture Fund IV, with $5 million; Fund III, $4 million; and Summit Partners Growth Equity Fund X, $15 million.
This marks the pension’s sixth venture commitment in H1 2020.
The organization has committed $77.5 million to the asset class so far this year. Most recently, the pension committed $20 million to DFJ Growth IV and $20 million to Canaan XII in April.
After the $40 million worth of commitments it made in April, it appeared that the pension was on track to match its 2019 commitment total of $220.1 million which was invested across 20 funds. Now that Q2 has wrapped up, this seems less likely. At this time last year, LAFPP had committed $91 million across eight funds, which it more than doubled in H2 2019.
However, the pension already passed its 2018 commitment tally. That year, the pension put $67.5 million to work across seven funds. The pension was also more active in venture during the latter half of 2019, so it’s hard to predict exactly where the numbers will reach when all is said and done in 2020.
At the end of 2019, venture made up about 33.9 percent of the pension’s private equity portfolio in a stake worth more than $1.35 billion. The strategy has a 15 percent to 35 percent target within the private equity’s bucket.
The strategy has a 9.8 percent Net IRR as of Q3 2019, and a 1.61x multiple as of the end of 2019.
The Los Angeles Fire and Police Pensions was founded in 1899 and serves more than 26,500 retired and active members. The pension has more than $21.3 billion in assets under management.