LACERS – Private Equity Consulting Services Performance Comparison

Private Equity Performance Comparison

Background 

On June 13, 2017, the (LACERS) Board interviewed the two finalists for the Private Equity Consultant Request for Proposal, Portfolio Advisors, LLC (Portfolio Advisors) and TorreyCove Capital Partners LLC (TorreyCove). Subsequent to the interviews and a discussion with staff regarding the finalists, the Board directed staff to acquire additional performance information from both firms to better assess each finalists’ potential to add value to the LACERS portfolio.

Performance Methodology and Evaluation 

Staff requested information based on each finalists’ fund recommendations from the years 2005 to 2013, categorized by buyout, venture capital, and special situations strategies. The information obtained included vintage year performance, commitment sizes and dollar amounts, and quartile rankings based on the Cambridge Associates private equity benchmarks. To determine performance and quartile rankings, the finalists were instructed to equal-weight performance of their fund recommendations in each category (buyout, venture capital, special situations, and total portfolio) by the number of fund recommendations made. The performance evaluation, as attached to this report as Attachment A (the link above), reflects stronger relative performance by Portfolio Advisors.

Strategic Plan Impact Statement 

The Private Equity Consultant assists LACERS in building a diversified portfolio to help the fund achieve a satisfactory long-term risk adjusted return (Goal IV). Implementing a competitive bidding process by issuing a Request for Proposal (RFP) is consistent with Goal V (uphold good governance practices which affirm transparency, accountability, and fiduciary duty).

This report was prepared by Jimmy Wang, Investment Officer I, Investment Division.

March 3, 2017 San Joaquin County Employees Retirement Association Board Meeting

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