LACERS allocates $200m to TPG and HPS private credit funds
The LA City Employees’ Retirement System (LACERS) has made two new investment allocations towards private credit funds, amounting to $200m (£154.28m).
According to notes from the latest LACERS board of administration meeting, the board voted in favour of committing up to $100m in the AG Direct Lending Fund V, which is managed by TPG Twin Brook.
The board also agreed to allocate up to $100m into the HPS Specialty Loan Fund VI which is managed by HPS Investment Partners. Earlier this year, HPS confirmed that more than $21bn had been raised for this fund.
Read more: HPS Investment Partners mulls IPO
Both allocations represent the first time that LACERS has opted to invest in either fund.
The investments were made as part of LACERS’ Private Credit Program 2024 Strategic Plan, which was adopted by the board on 27 February 2024. The plan was laid out by Aksia, and recommends $500m to $700m in commitments to private credit for 2024.
The strategy is intended to help the board to build a diversified private credit and total fund portfolio which optimises long-term risk adjusted investment returns and promotes good governance practices.
Read more: HPS talking to BlackRock about possible sale
TPG has an existing relationship with LACERS, which previously committed to seven private equity funds and one real estate fund managed by the GP. In meeting notes, the board described the TPG fund as having a “strong track record since 2015, generating levered net returns of ~10-12 per cent across four vintages while investing at conservative (< 4.5x) entry leverage levels.”
HPS is a new general partner relationship for LACERS.
LACERS has approximately $23bn in assets under management. It has a 16 per cent target allocation to private equity and a 12 per cent target allocation to real assets.
Read more: TPG’s Angelo Gordon acquisition helps boost credit AUM by 10pc in Q2